Bipartisan U.S. Lawmakers Propose Bill To Eliminate Tariff Exemption For Chinese E-commerce Shipments

A bipartisan group of U.S. lawmakers plans to introduce a bill aimed at eliminating a widely-used tariff exemption that allows e-commerce sellers to ship orders from China to U.S. shoppers.

The exemption, known as the de minimis rule, currently applies to imports valued at $800 or less when shipped to individual consumers. If the bill is enacted, it would immediately prohibit such shipments from China. Republican Senator Bill Cassidy, a sponsor of the bill stated.

E-commerce sellers like Shein, a China-founded company based in Singapore, and Temu, a rival owned by PDD Holdings Inc operating the Chinese e-commerce site Pinduoduo, are major beneficiaries of this exemption.

In April, a federal brief stated that these companies “exploit” the de minimis rule to avoid paying duties and import items, including those manufactured in China’s Xinjiang region with forced Uyghur labor.

Recently, a spokesperson from Shein stated that the company does not have any manufacturers in Xinjiang. However, there was no immediate response from Temu when requested for comment.

The issue of de minimis shipments has been a matter of concern since at least 2019 when the U.S. Consumer Product Safety Commission reported difficulties in identifying unsafe imports due to the high volume of low-value packages. According to U.S. customs data, the number of such shipments increased to 685.5 million in 2022 from 410.5 million in 2018.

The bill has additional sponsors, namely Republican Senator J.D. Vance and Democratic Senator Tammy Baldwin. It remains uncertain how much support the proposal will gather. A separate but similar bill introduced by Democratic Representative Earl Blumenauer failed to pass Congress last year.

If the bill is enacted, countries other than China and Russia would be able to maintain the exemption by adopting the $800 threshold for their own tariff-free imports. The bill would also restrict the transportation of de minimis packages to private shippers like FedEx, UPS, and DHL, excluding postal services.