New Delhi: In a fresh set of restrictions against Chinese imports, the US has introduced new rules against textiles, shoes, machinery, apparel and other products that enter the American market duty-free under a special exemption.
Under the new rules, US President Joe Biden’s administration seeks to counter low-value products mainly originating from China-founded e-commerce platforms.
“The majority of shipments entering the United States claiming the de minimis exemption originate from several China-founded e-commerce platforms,” according to a statement issued by the White House Friday.
This puts “American consumers at risk, undercutting American workers and businesses, and resulting in the importation of huge volumes of low-value products”, it added.
This comes two months ahead of the presidential elections where tariffs and China have emerged as key issues.
During last week’s presidential debate between Vice-President Kamala Harris and former president Donald Trump, the former argued that her rival “sold us out” to China by “selling American chips to China to help them improve and modernise their military”.
Trump countered that the Biden administration has retained many of his administration’s tariffs on China.
This year, the Biden administration has slapped tariffs on a range of Chinese goods, from electric vehicles to semiconductors. In May, the US announced tariff hikes on Chinese goods totalling $18 billion. It raised the tariff rate on certain steel and aluminium products from 0–7.5 percent to 25 percent this year.
Also Read: How small Indian-American community is contributing to US economy, wielding influence
What is the ‘de minimis’ exemption?
De minimis is a Latin phrase that means “pertaining to minimal things”. In commerce, a de minimis exemption refers to shipments with a retail value of $800 or less being allowed to enter a market duty-free. Not just the US, but 88 other countries have this provision for imported goods.
According to the statement from the White House, goods entering the market under this provision have “less information” which makes it increasingly difficult to block illegal or unsafe shipments.
“Some companies exploit the de minimis to conceal shipments of illegal and dangerous products and avoid compliance with US health and safety and consumer protection laws. Other foreign entities use it to circumvent US trade enforcement actions intended to level the playing field for American workers, retailers, and manufacturers,” it said.
The statement added that, over the last decade, the number of goods entering the US under the provision has increased from roughly 140 million a year to over one billion a year.
Which Chinese companies will be affected?
Tougher oversight of the de minimis loophole will entail tariff increases on billions of dollars of Chinese goods. Democrat lawmakers say this will help combat China’s “unfair, anticompetitive” practices.
Fast-fashion retailer Shein — banned in India in 2020 — and online marketplace Temu are some Chinese companies expected to be affected by the new rules. Such platforms made quick inroads into the American market during the pandemic.
Shein, for example, accounted for 50 percent of US fast-fashion sales in November 2022, a sharp increase from 12 percent in January 2020. It quickly overtook competitors like Zara, H&M, Forever 21 and Fashion Nova, according to an analysis by Bloomberg Second Measure.
After a border dispute erupted between India and China in mid-2020, the Modi government banned a slew of Chinese apps, including Shein, TikTok and others. However, reports indicate that Shein is preparing a comeback to the Indian market and is seeking a partnership with Reliance Retail.
(Edited by Sanya Mathur)
Also Read: Hit and scoot: China’s Global Times targets Jaishankar in article, withdraws English version later