Under a new regulatory effort, US officials will be seeking to disqualify certain products from this trade exemption -- a move that could impact Chinese textile and apparel imports.
While roughly 140 million annual shipments entered the United States under the de minimis exemption a decade ago, this surged to over a billion last year.
A key factor behind the rise is the growth of Chinese-founded online retailers Shein and Temu, according to US officials. Both platforms are known for selling items at low prices.
"American workers and businesses can outcompete anyone on a level playing field, but for too long, Chinese e-commerce platforms have skirted tariffs by abusing the de minimis exemption," said Secretary of Commerce Gina Raimondo in a statement.
"Foreign companies, predominantly China-founded e-commerce platforms, are flooding the US market with low-value products," National Economic Council deputy director Navtej Dhillon told reporters.
"This exponential increase in de minimis shipments makes it more challenging to enforce our laws," he added.
As the exemption stands, such foreign shipments enter the country with fewer oversights, potentially allowing unsafe products and illicit substances to avoid scrutiny as they enter the United States, said Dhillon.
To prevent this, President Joe Biden's administration will seek to disqualify certain products from the exemption.
This includes goods facing Section 301 tariffs -- a key tool used to justify levies against China in recent years.
Section 301 tariffs hit approximately 70 percent of Chinese textile and apparel imports, meaning the move would drastically reduce the number of shipments entering through the de minimis exemption, said Daleep Singh, deputy national security advisor for international economics.
Also targeted are packages containing products subject to Section 232 tariffs on steel and aluminum goods, as well as Section 201 safeguards impacting solar manufacturing.
Officials said tighter rules do not apply to imports from a single country.
On Wednesday, a group of over 120 US lawmakers raised "grave concerns" over the de minimis "trade loophole" in a letter and urged Biden to close it.
They said such imports threatened US manufacturers and charged that these "expose American consumers to great risk by flooding the market with fake and sometimes dangerous imported goods, including fentanyl and precursor chemicals from China."
US officials will also look to introduce rules for those who continue using the de minimis exemption, such as new information collection requirements.
"The administration is calling on Congress to pass legislation this year to comprehensively reform the de minimis exemption," said Singh.
US finalizes sharp tariff hikes on Chinese EVs, other goods
Washington (AFP) Sept 13, 2024 -
The United States locked in tariff hikes on billions of dollars worth of Chinese goods Friday, with a 100 percent duty on electric vehicles and 25 percent on EV batteries taking effect in two weeks.
The White House announced the steep tariff increases in May, targeting key sectors including EVs, semiconductors, batteries and solar cells -- drawing a fiery response from Beijing.
It also comes ahead of November's presidential election, where both Democrats and Republicans are seeking to show a tough stance on China as competition between both countries intensifies.
"Today's finalized tariff increases will target the harmful policies and practices of the People's Republic of China that continue to impact American workers and businesses," said US Trade Representative Katherine Tai in a statement.
Apart from tariff increases that take effect later this month including those on solar cells, the US Trade Representative's office confirmed that a 50 percent duty on semiconductors -- a sharp rise from before -- would start in 2025.
A 25 percent tariff on lithium-ion batteries that are non-EV take place January 2026, said the USTR.
The tariff hikes on about $18 billion worth of goods were taken after a review of levies imposed under then-president Donald Trump, which impacted some $300 billion in goods from China.
The moves this year impact both products already targeted by earlier Trump tariffs as well as additional ones.
But the Biden administration's moves go beyond tech for green energy, also impacting goods like cranes and medical products.
Tariffs on ship-to-shore cranes will rise to 25 percent this year, said the USTR.
But the final decision allows exclusions for Chinese cranes ordered before mid-May, if they are delivered before May 2026.
The move on Friday allows some reprieve to port operators, given that China dominates the industry while the United States works to rebuild its own capacity to produce port cranes.
Among medical products, the USTR said it would lift tariffs on medical face masks to 50 percent -- higher than a proposed level of at least 25 percent.
But it delayed the start of 50 percent tariffs to 2026, to give time for a shift away from Chinese sellers.
Levies would also impact items like medical gloves.
President Joe Biden's administration has pumped massive funding into areas like semiconductor manufacturing and research, alongside efforts to boost green investments, and is concerned about underpriced exports from China.
On Friday, the US government also announced it would move to curb a surge in lower-value shipments entering without being subject to tariffs -- concerned about Chinese products entering with minimal scrutiny.
The trade rule is known as de minimis, and foreign shipments are eligible for exemption if the fair retail value of items imported is $800 or less.
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