Big news! The US will cancel the $800 import duty-free policy! Temu and SHEIN are hit hard

According to a report on the Wall Street Journal website on April 6, the U.S. market will crack down on an import method favored by Chinese cross-border e-commerce platforms such as Temu and SHEIN .

Cross-border knowledge learned that this method once allowed cheap clothing from China to flow into the United States without tariffs and almost without scrutiny. But now, as part of a broader trade enforcement strategy, small packages will be subject to stricter scrutiny !

The U.S. Department of Homeland Security reportedly said on April 5 that "small exemption" shipments, which are low-value packages that are typically sent directly to U.S. consumers, will be subject to stricter scrutiny, including investigations into whether the imported goods violate some U.S. bans.

The U.S. Department of Homeland Security said the action announced on the 5th will "expand the scope of targets" and conduct laboratory testing and focused law enforcement operations.

The report pointed out that since parcels with a value of less than $800 mailed directly from abroad are not subject to customs duties and are not subject to strict inspection by U.S. Customs, the number of such parcels sent to the United States has surged in recent years.

In 2023, about 1 billion of these packages will enter the United States this way, most of them from China. One report said Temu and SHEIN most likely accounted for nearly a third of the small exemption shipments.

Temu previously stated that the allegations of its use of forced labor were unfounded and that the company's development did not rely on the "small exemption" clause . SHEIN also stated that the company had "zero tolerance" for forced labor and that the "small exemption" clause was not the key to its success.

$800 in taxes to be changed?

It is worth noting that the new "minimum denominator" rules proposed by the United States may cause countries to pay different tariffs on their goods imported into the United States, and some countries may even lose this right completely.

Under the current Trade Facilitation and Trade Enforcement Act, the minimum tax threshold for U.S. imports is set at $800 . However, U.S. lawmakers have been seeking to reform this provision in recent years, especially due to the issue of duty-free access to low-value e-commerce imports. According to the Wall Street Journal, the tax revenue loss caused by this is as high as about $67 billion .

Republican Congresswoman Maria Elvira Salazar formally introduced the “American Act” on March 6, providing clear direction for new minimum rules.

The bill pledges $14 billion in funding for domestic textile manufacturing to incentivize nearshoring. The bill's sponsors propose raising revenue by adjusting the minimum tax rate to fund nearshoring.

Although the Americas Act is still in its early stages and has not yet been fully reviewed and voted on by the U.S. legislative system, calls to lower the $800 minimum threshold are growing.

An insider in the U.S. e-commerce industry said: " If the bill is passed, it will have a profound impact on importers and e-commerce logistics providers . In order to ensure that goods can avoid the minimum threshold, more 'creative declarations' may appear, and import business (especially air freight) will be the first to be hit ."

However, the source also pointed out that he was skeptical about whether the bill could be passed smoothly because the presidential election in November makes US politics full of uncertainty in the short term .

Chinese cross-border e-commerce platforms are criticized in the US

In fact, this is not the first time that the United States has criticized Chinese e-commerce. As early as April 2023, the U.S.-China Economic and Security Review Commission under the U.S. Congress issued a report pointing out that Chinese cross-border e-commerce platforms such as Temu and SHEIN have problems with data security, procurement violations, and infringement of intellectual property rights, and recommended that the U.S. government remain vigilant.

In response, Shu Jueting, spokesperson of the Ministry of Commerce, said at a regular press conference that the US report was unverified, used uncertain expressions, and quoted non-authoritative corporate statements to accuse Chinese e-commerce platforms, which was neither professional nor responsible. China expressed serious concern about this .

Shu Jueting pointed out that the Chinese government attaches great importance to data security and intellectual property protection, constantly improves the legislative system, improves law enforcement efficiency, guides industry self-discipline, and resolutely punishes illegal acts in accordance with the law. China is willing to strengthen cooperation with all parties to jointly create a fair and competitive business environment for global companies.

At that time, according to Sensor Tower data, four of the top five popular apps in terms of downloads in the US App Store were from China, including Temu, CapCut, TikTok and SHEIN .