Biden moves to close China trade ‘loophole’

WASHINGTON: US President Joe Biden’s administration said on Friday it intends curb the entry of cheap products sold out of China by e-commerce companies such as Temu and Shein.

The White House has announced plans to limit the entry of Chinese products through e-commerce platforms such as Temu and Shein. Products were being sold under a duty-free exemption.

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The products were being sold under a “de minimis” exemption that was applied to items worth $800 or less.

The move comes amid rising trade tensions between the world’s two largest economies. In May, Biden quadrupled tariffs on Chinese electric vehicles and raised levies on other green tech.

What else did the White House say about the trade restrictions?

White House officials said they will propose a new rule to deny the exemption to packages that contain low-value goods subject to various tariffs on Chinese imports.

The proposal includes a requirement for information disclosure to help border officials better identify contents and identify illicit or unsafe products.

The US has in recent years suffered from a drug epidemic related to fentanyl overdoses. Most of the chemicals need to produce the narcotic are synthetically produced in Asian countries such as China.

US officials also accused Chinese firms of exploiting a trade loophole.

“American workers and businesses can outcompete anyone on a level playing field, but for too long Chinese e-commerce platforms have skirted tariffs by abusing the de minimis exemption,” said U.S. Secretary of Commerce Gina Raimondo.

The White House said that the volume of packages under the $800 threshold increased to over one billion in 2023, compared to around 140 million a decade ago. Officials attributed most of the growth to Chinese e-commerce companies.

Threshold part of US law since 1930

The “de minimis” threshold has been part of US trade law since 1930 to accommodate individual travelers.

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Packages under the threshold enter the US duty-free and with reduced customs scrutiny as long as they are addressed to individuals’ residences.

The limit was raised from $200 to $800 in 2015 to help small businesses, including sellers on e-commerce platforms.