Hundreds of millions of goods will be intercepted by US customs? Low-price internal circulation is no longer feasible!

▶ Video account attention cross-border navigation

It is learned that the U.S. Xinjiang cotton ban officially came into effect on June 21. According to the bill, CBP stated that the U.S. Customs will have the right to detain any products from Xinjiang and then provide detention notices to the merchants of the detained products.

Recently, the U.S. Customs seized some products of the American sports brand Skechers that were produced in China and shipped to the United States on the grounds of "employing Xinjiang workers." In response, Skechers is preparing to file a complaint with the U.S. Customs.

As the saying goes: When it rains, it leaks; when the ship is late it encounters headwinds.

In addition to the Xinjiang cotton ban, the "American COMPETES Act of 2022", which mainly "restricts" Chinese companies, has recently been put back on the agenda.

The US Competition Act is on the agenda. Will small package products no longer be tax-free?

According to the bill, the United States will prevent "regions/countries with non-market economy status" from obtaining the "minimum threshold" for taxation, thereby avoiding "unfair" competition. The "minimum threshold" here refers to the policy stipulated in the Trade Facilitation and Trade Enforcement Act that individuals in the United States can enjoy tax exemption if the total amount of imported goods does not exceed US$800.

That is, after the bill is officially implemented, Chinese cross-border e-commerce companies will no longer be eligible for "tax exemption for goods imported into the United States with a total value of no more than US$800." Some sellers have revealed that after this, all packages sent from China will be intercepted by US customs, and goods with a value of less than US$800 may be taxed according to the tax rate for general trade.

It is learned that so far, the value of a single package of direct mail small parcels such as clothing, toys, 3C digital products, etc. sent from China to the United States is almost all less than US$800. That is, once the bill is officially implemented, it will undoubtedly increase the costs for most Chinese cross-border sellers of direct mail small parcels.

As of now, the bill has not been approved by the Senate.

But recently, CEOs of more than 100 American companies, including Internet giants such as Google's parent company Alphabet, Amazon and Microsoft, issued a joint open letter, calling on the US Congress to pass the "American COMPETES Act of 2022" as soon as possible.

With the joint action of more than 100 American companies, the bill will most likely be put back on the agenda, and the bonus period for Chinese cross-border sellers to rely on price advantages to achieve great success on cross-border e-commerce platforms may be gone forever.

It is also learned that this is not the first time that the United States has been "eyeing" import taxes.

The policy of imposing additional tariffs was issued, and low-priced products are not competitive enough

As early as 2018, the United States announced that it would impose a 25% tariff on $50 billion worth of Chinese goods and a 10% tariff on $200 billion worth of Chinese goods . By the beginning of 2021, the average U.S. tariff on Chinese goods was as high as 19.3% .

After the implementation of the tariff increase policy, the cost price of goods exported by Chinese cross-border sellers to the United States rose rapidly. Turning to direct mail parcels to win at low prices and tax exemptions has become the most direct solution for many Chinese sellers to deal with this policy.

Data shows that after the tariff policy was released, the number of direct mail parcels exported from China to the United States increased sharply , from 495 million in 2018 to 771 million in 2021. The latest statistics from the U.S. Customs also show that in the first quarter of 2022 alone, 165 million parcels entered the United States by air in a "duty-free mode."

It is learned that although there are reports that the two actions of the US "301 investigation" tariffs on Chinese products (including photovoltaic modules) will end on July 6 and August 23 this year respectively, and the relevant tariffs may be cancelled, as of now, there are still a considerable number of Chinese products on the US tariff list.

Now, the United States is going to cancel the $800 tax-free limit, which will add to the already tight costs for China's low-price export sellers.

As one seller said: If the survival space of cross-border sellers comes only from the slight price advantage brought about by tax exemption, then this itself is not a business worth persisting in.

We would also like to remind all cross-border sellers that in the context of an unstable macro environment, the strategy of relying solely on low-price overseas expansion is already on the precipice of collapse. It is time for Chinese cross-border sellers to re-examine their overseas expansion strategies.

In the future cross-border e-commerce industry, the entry threshold will undoubtedly be further raised. Low prices cannot be used as a trump card to retain consumers. Only by building a brand can you have the ability to charge a premium and "wait until September 8th in autumn, when my flowers bloom and all other flowers die."

What do you think about this? Welcome to discuss in the comment area~