The US has introduced new rules that would impose taxes on many low-value shipments from China, targeting the influx of packages from e-commerce platforms like Shein and Temu. The Biden administration said the measure aims to prevent misuse of a loophole that allows items under $800 (£600) to enter the US without tariffs or additional fees.
Officials said this “de minimis” rule has enabled companies such as Shein and Temu, which often ship directly from manufacturers to customers, to offer lower prices and outcompete rivals. Both firms defended their business practices in statements.
The exemption was raised from $200 to $800 in 2016 to promote trade and prioritize higher-value shipments, but concerns have grown over its exploitation by fast-growing companies like Shein and Temu in the US market. Under the proposed changes, Chinese goods that currently face US tariffs—such as footwear, machinery, and a large portion of textiles—would no longer be exempt. Additionally, shippers would be required to provide more detailed information to authorities.
Temu claimed its business model relies on efficiency and cutting out middlemen, allowing it to offer competitive prices. It said it was reviewing the new rules but remains committed to delivering value to customers. Shein emphasized its “on-demand” model and voiced support for reforms that would apply the de minimis rule more fairly. The company also highlighted its collaboration with US Customs and Border Protection (CBP) to increase transparency about its shipments.
Both brands have gained popularity in recent years, using aggressive marketing strategies, including Super Bowl ads, and offering ultra-low prices. Their rapid rise has not only challenged e-commerce giant Amazon but also drawn scrutiny from US lawmakers and regulators, who have raised concerns about product safety and the possibility of forced labor in their supply chains.
Officials blame the success of companies like Shein and Temu for straining US customs as shipments under the de minimis threshold have surged, from 140 million in 2013 to over a billion in 2023. The Biden administration cited the dominance of China-based e-commerce platforms in these low-value shipments as the reason behind the rule change, accusing companies of bypassing consumer protection laws and trade regulations.
Commerce Secretary Gina Raimondo stated that US workers can compete globally when on equal terms, but argued that Chinese e-commerce firms have taken advantage of the de minimis exemption for too long. The American Action Forum estimates that eliminating the exemption could lead to $8 billion to $30 billion in additional annual costs for consumers. The proposal will undergo a comment period before being finalized. Similar actions have also been considered by the European Union.
Following the announcement, shares in PDD Holdings, which owns Temu, dropped by over 2%.
