White House urges Congress to pass bill to improve tariff exemption rules abused by SHEIN and Temu
Budget online shopping sites such as SHEIN and Temu have taken advantage of the tariff exemption rules of various countries because they sell low-priced products. However, due to the sharp increase in cases of abuse of these tariff exemption rules, the United States is accelerating efforts to revise the tariff exemption rules.
FACT SHEET: Biden-Harris Administration Announces New Actions to Protect American Consumers, Workers, and Businesses by Cracking Down on De Minimis Shipments with Unsafe, Unfairly Traded Products | The White House
White House de minimis loophole rules target Shein, Temu
https://www.cnbc.com/2024/09/13/de-minimis-shein-temu-biden-china-rules.html
Secretary Raimondo Statement on New Actions to Address Surge in De Minimis Shipments | US Department of Commerce
https://www.commerce.gov/news/press-releases/2024/09/secretary-raimondo-statement-new-actions-address-surge-de-minimis
Biden moves to crack down on Shein and Temu, slow shipments into US | Ars Technica
https://arstechnica.com/tech-policy/2024/09/biden-moves-to-crack-down-on-shein-and-temu-slow-shipments-into-us/
Biden Administration Ratchets Up Tariffs on Chinese Goods - The New York Times
https://www.nytimes.com/2024/09/13/us/politics/biden-tariffs-chinese-goods-clothing.html
Biden is cracking down on Shein and Temu | Fortune
https://fortune.com/2024/09/13/biden-china-shein-temu-tariffs-imports-loophole-crackdown/
In the case of cheap products imported from overseas, there are cases where the cost of collecting customs duties exceeds the tax revenue that can be collected as customs duties. Therefore, there is a rule called 'de minimis exemption' that prevents customs duties from being collected on cheap products. In the United States, products costing less than $800 (about 113,000 yen) are exempt from customs duties. Note that before 2016, the de minimis exemption was for 'products costing less than $200 (about 28,000 yen).'
On September 13, 2024 local time, the Biden administration announced that it would take new measures to protect American consumers, workers and businesses, citing a sharp increase in abuse of the de minimis exemption, especially with the emergence of Chinese e-commerce platforms. According to an official statement by the Biden administration, over the past decade, the number of goods imported into the United States claiming the de minimis exemption has increased from 140 million items to over 1 billion items per year, making it difficult to prevent the inflow of raw materials and manufacturing machinery for illegal synthetic drugs into the country.
The majority of shipments claiming de minimis exemptions to the US are sent from several e-commerce platforms established by China. The government explained that this 'endangers American consumers, oppresses workers and businesses, and allows large amounts of low-priced products, such as textiles and apparel, to enter the US market duty-free.' 'The increasing abuse of de minimis exemptions makes it increasingly difficult to accurately block illegal or unsafe shipments. Foreign companies that abuse de minimis exemptions do so for a variety of reasons, and some use de minimis exemptions to hide the fact that they are shipping illegal and dangerous products and to avoid complying with US health and safety and consumer protection laws.'
To prevent abuse of the de minimis exemption, the Biden Administration has issued a statement calling on Congress to pass legislation to comprehensively improve the de minimis exemption by 2024. Specifically, in order to reduce the number of imports that fall under the de minimis exemption, the Biden Administration calls for the exclusion from the de minimis exemption of all shipments that contain products subject to tariffs imposed under Sections 201 or 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962.
Section 301 of the Trade Act of 1974 covers about 40% of American imports, including 70% of textile and apparel imports from China. Some e-commerce platforms and other overseas sellers avoid these tariffs by claiming minimal exemptions to ship goods from China to the United States.
The proposed amendments to the de minimis exemption propose to require certain additional data on de minimis shipments, such as the 10-digit tariff classification number and the person applying for the de minimis exemption, which would improve the targeting of de minimis shipments and facilitate the expedited clearance of legitimate de minimis shipments.
Other changes include clarifying who is eligible for administrative exemptions and requiring filers to identify on whose behalf they are applying for an exemption. These new requirements are expected to help U.S. Customs and Border Protection (CBP) protect consumers from goods that do not meet regulatory health and safety standards and protect U.S. businesses from unfair competition against imports that are subject to tariffs or entry restrictions.
Additionally, Consumer Product Safety Commission (CPSC) staff plans to propose a final rule that would require importers of consumer products, including de minimis shipments, to submit an electronic Certificate of Compliance (CoC) to CBP and CPSC at the point of entry. This regulation would strengthen CBP and CPSC's ability to stop unsafe products from entering the U.S. market and help prevent foreign companies from using de minimis exemptions to circumvent consumer protection testing and certification requirements.
'American textile and apparel manufacturers play a vital role in the country's defense industrial base and support hundreds of thousands of direct and indirect jobs in the country. However, they face unfair competition from several major e-commerce companies established in China, and the Biden Administration is considering amendments to support American textile and apparel manufacturers and their workers,' the Biden administration explained.
In addition, not only in the United States but also in the European Union (EU), the standard of 'exemption from tariffs on imported goods below 150 euros (24,000 yen)' is being considered for abolishment in order to impose tariffs on Chinese petit pla brands.
EU considers abolishing duty-free quota to impose import tariffs on Chinese SHEIN, Temu, and AliExpress - GIGAZINE
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