Biden Administration Targets Chinese E-Commerce Loophole

The Biden administration aims to close a loophole in U.S. trade law that allows low-value shipments to enter duty-free. This move targets Chinese e-commerce giants like Shein and Temu. New rules will enhance customs scrutiny and help identify illegal and unsafe products, reducing de minimis shipments.

The Biden administration announced on Friday its intent to crack down on low-value shipments entering the U.S. duty-free under the $800 "de minimis" threshold, a loophole widely exploited by Chinese e-commerce firms such as Shein and Temu. According to White House officials, new trade rules will be proposed to eliminate the duty-free exemption for packages containing low-value goods subject to tariffs on Chinese products, steel, and aluminum, and certain other items like solar products and washing machines.

A key part of the proposed rule includes requiring more extensive information disclosure for small packages to help U.S. Customs and Border Protection agents identify illicit or unsafe content, such as precursor chemicals for opioids like fentanyl. Secretary of Commerce Gina Raimondo emphasized the need for fair competition, stating that American workers and businesses can outcompete when on a level playing field.

The announcement follows a call from Democratic lawmakers urging President Biden to address what they termed a "loophole" that allows Chinese imports to circumvent tariffs and avoid customs inspection. The de minimis exemption, raised to $800 in 2015, has seen a surge in usage from 140 million to over 1 billion packages annually, mostly attributed to Chinese firms. The new rules seek to manage this influx to better screen suspicious packages.

(With inputs from agencies.)