New de minimis executive action targets Chinese retailers

The Biden-Harris administration on Sept. 13 announced new executive action to regulate de minimis shipments to the United States that would significantly affect Chinese e-commerce imports. [caption id="attachment_57134331" align="alignright" width="201"] (Photo/Canstock)[/caption] The order, which could go into effect as early as Nov. 29 — Black Friday, one of the biggest shopping days of the year in the U.S. — would restrict the eligibility of 95% of textile and apparel imports from China for de minimis regulations, which currently allow imports under $800 to enter the U.S. duty- and tax-free, according to a webinar on the order today from digital freight forwarder Flexport . The action would exclude from the de minimis exemption all shipments containing products covered by tariffs imposed under Sections 201 or 301 of the Trade Act of 1974, or Section 232 of the Trade Expansion Act of 1962. Textiles and apparel fall under Section 301 and would be most affected under this action. The action also clarifies new rules on data sharing, including more specific details of shipments and the packaging used to ship them. Shein , Temu and Amazon would likely be the most affected online retailers under the proposed executive action. “More than a billion shipments now enter the U.S. under de minimis exemption each year, with the majority originating from Chinese e-commerce platforms,” Niall van de Wouw , chief airfreight officer at Xeneta , said in a release today. “This extraordinary level of demand is not going away and the genie cannot be put back in the bottle.” E-commerce is projected to increase globally 8.8% year over year in 2024, according to a recent DHL Express report . Protecting U.S. businesses The Biden administration aims to implement an overall reduction in de minimis shipment volumes to help protect small businesses and American consumers from unsafe and unfairly traded products, according to a Sept. 13 release from the White House . “I think we've seen that de minimis [shipments] have exponentially increased over the decade,” Marcus Eeman , senior global customs manager at Flexport, said in the webinar today. “I think [in years past] there were 140 million parcels per day,” Eeman said. “Now it's about 1 billion. And [ U.S. Customs and Border Protection ] is looking at about 4 million de minimis shipments per day that they're processing. So, it's been a huge change, and the amount of shipments coming in is making it a little bit harder for them to enforce.” The White House said that the exponential increase in de minimis shipments adds challenges to: Enforcing U.S. trade laws; Maintaining health and safety requirements; Protecting intellectual property rights; Enforcing consumer protection rules; and Blocking illicit synthetic drugs such as fentanyl and synthetic drug raw materials and machinery from entering the country. Impact to consumers The executive action requires more data sharing and restrictions, which may affect shippers and consumers negatively, Brandon Fried , executive director of the Airforwarders Association , told Air Cargo Next . “The complex data-filing requirements for low-value shipments could lead to increased costs for both retailers and consumers,” he said. “Additionally, these changes could slow the flow of goods, resulting in longer wait times for consumers. If the cost of importing low-value goods becomes prohibitive, retailers may reduce their offerings, limiting consumer choices.” Small businesses, consumers and the e-commerce industry may be disproportionately affected by these changes, he said. Increased costs and regulations could make U.S. businesses less competitive in the global marketplace, Fried said. “Other countries may retaliate with their own trade barriers , leading to a cycle of protectionism,” he said. “Furthermore, the changes could hinder the flow of new products and technologies, limiting innovation and economic growth.”

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