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SHEIN, Temu, and Amazon have used the “de minimis” exception to evade tariffs and inspections. Now Rep. Earl Blumenauer is aiming to make things right.
Editor’s note: Alliance for American Manufacturing President Scott Paul delivered the message below to our email supporters on Thursday.
You may have heard of SHEIN, the Chinese fast fashion website popular among Gen Zers. Or perhaps you’ve seen ads for Temu, another Chinese online retailer quickly seizing market share.
And I’m certain you know about Amazon, the retail behemoth that was built right here in the USA.
All three of these brands are now dominating the retail space. All three also have attracted a lot of controversy, from allegations that they sell products made with forced labor and sweatshop production to environmental concerns to accusations of intellectual property theft. And right now, a loophole in our trade laws means these brands are shipping their products to the U.S. duty-free – and without being properly inspected.
I recently chatted with Rep. Earl Blumenauer (D-Ore.) for The Manufacturing Report podcast about how these companies and others are exploiting the “de minimis” loophole that allows shipments valued under $800 to enter the country without inspection.
Companies exploit de minimis by using direct-to-consumer shipping. So, while a brand technically ships an individual package valued under $800, they are actually sending over much more. A recent congressional investigation, for example, found that SHEIN and Temu alone ship around 600,000 packages to the United States under de minimis every day – which adds up to 210 million packages a year.
These two companies paid $0 in duties in 2022.
That’s not all. Shipping individual packages also allows companies to dodge U.S. Customs inspections to enforce laws like the Uyghur Forced Labor Prevention Act, which bans imports of goods made in the Xinjiang region of China, where forced labor is prevalent.
“There’s no question that they are using this loophole to escape being accountable for forced labor in China,” Blumenauer told me.
Rep. Blumenauer is one of the sponsors of bipartisan legislation called the Import Security and Fairness Act, which would work to close the loophole by banning packages from non-market economies like China from benefiting from de minimis.
Right now, the de minimis loophole is giving bad actors an advantage over companies that play by the rules. American manufacturers and workers already must compete with overseas brands that don’t abide by the same labor and environmental rules. Why is our own trade policy underwriting these importers?
Alliance for American Manufacturing