US lawmakers from both sides of the aisle are scheduled to present a bill this Wednesday, aimed at eradicating a popularly used tariff exception that allows e-commerce sellers to deliver orders from China to American customers without paying tariffs. This was according to information provided by Republican Senator Bill Cassidy, one of the sponsors.
The tariff exemption, known as the de minimis rule, allows items valued at $800 or less to be shipped to individual consumers without incurring tariffs. This rule would be abolished for shipments from China immediately upon the proposed law's enactment, as per Senator Cassidy.
E-commerce companies such as Shein, which was founded in China and is currently based in Singapore, and Temu, a competitor owned by PDD Holdings Inc that oversees the Chinese e-commerce platform Pinduoduo, are significant beneficiaries of the de minimis exemption. A federal report released in April asserted that these businesses exploit the rule to sidestep tariffs and import prohibited items, including goods produced through forced Uyghur labor in China's Xinjiang region.
In a statement on Tuesday, a spokesperson for Shein denied the company having any manufacturing operations in Xinjiang. There was no immediate response to a request for comment from Temu.
The de minimis shipments have been under scrutiny since at least 2019, when the U.S. Consumer Product Safety Commission revealed difficulties in intercepting unsafe imports due to the vast quantity of low-value packages. According to U.S. customs data, these shipments rose to 685.5 million in 2022 from 410.5 million in 2018.
Joining Cassidy in sponsoring the bill are Republican Senator J.D. Vance and Democratic Senator Tammy Baldwin. It remains uncertain how much support the proposed law will receive. A similar bill proposed by Democratic Representative Earl Blumenauer failed to make it through Congress last year.
Under the proposed legislation, countries other than China and Russia could retain the exemption by implementing the $800 limit for their own tariff-free imports. The bill would restrict the transportation of de minimis packages to private shipping companies like FedEx, UPS, and DHL, excluding postal services.
