Two U.S. senators, Sherrod Brown and Rick Scott, are urging President Joe Biden to take executive action to end duty-free treatment for packages from China valued below $800. They argue that U.S. manufacturers are unable to compete with low-cost competitors from China who rely on forced labor and state subsidies. The surge in shipments from companies like Temu, Shein, and AliExpress is harming American manufacturing and retail sectors, according to the senators.
The de minimis threshold of $800 per person, per day allows packages bound for American consumers to enter the country tariff-free. Lawmakers have filed legislation to change how the U.S. treats imports valued at less than $800 due to the large increase in such shipments from China. The senators believe that ending duty-free treatment for these products is necessary to protect American businesses and workers from unfair competition and exploitation.
The White House has not yet responded to the senators’ letter, but the Office of the U.S. Trade Representative is expected to address the issue. The change in duty-free treatment in 2016 led to a significant increase in “de minimis” shipments, from 220 million packages to 685 million in fiscal year 2022. The higher threshold was intended to speed up commerce and lower costs for consumers, but it has raised concerns about the impact on American industries and jobs.
Many in the business community support the $800 threshold for duty-free treatment, citing the benefits of faster shipments and lower transaction costs for consumers. John Pickel of the National Foreign Trade Council argues that increasing the threshold could delay shipments and raise prices for consumers. The average shipment coming through the de minimis category is $55, and eliminating duty-free treatment would double the cost for consumers due to additional fees and import duties.
The textile industry has been particularly hard hit by the surge in duty-free imports, with 10 plants closing in the past four months. The National Council of Textile Organizations is calling on the Biden administration to take executive action to address the issue. The influx of imports through the de minimis loophole is undermining the U.S. textile industry and its workforce, according to the organization’s president and CEO, Kim Glas. The impact of duty-free packages from China extends beyond retail products, affecting various sectors of the American economy.
