President Trump’s decision to impose strong invoices on Canada, Mexico and China included a minimal but significant change in the way online purchases will be taxed when entering the United States.
A provision of Mr Trump’s executive order will increase the cost for more than 80 % of US e -commerce imports. The decision could shift the landscape for internet sales from Chinese sellers such as Shein and Temu that have rapidly expanding their market share by sending cheap goods to the United States.
The president’s order has erased a solution that many companies have benefited in recent years, especially because Mr Trump imposed invoices on Chinese products during his first term. The provision, known as the de minimis, allowed some products that are directly sent to consumers from online platforms to come to the United States without facing invoices, a huge tax advantage.
This dark providing commercial law supports important business models. Shein, Temu and many sellers on Amazon used de Minimis exemption to bypass invoices. The exemption allows the packages to be shipped from other countries without paying invoices, since shipments do not exceed $ 800 per recipient per day.
But critics say the De Minimis measure also helped to burn a US drug crisis. Importers who use de minimis do not need to provide so much information on customs and US border protection, as well as other packages, for ease of processing. This means that drugs and precursors used to do so could be more easily transported to the United States without the government to catch them.
De Minimis has come from a century of commercial law originally intended for missions that would be very insignificant to deserve the attention of customs. But the use of this layout is exhausted in popularity.
A report released last week by Congress Research Service found that Chinese low -value packages increased to $ 66 billion in $ 2023 from $ 5.3 billion in 2018. While Mr Trump’s executive order applies to China Canada and Mexico, China is a much larger source for such packages. The country is responsible for about two -thirds, sending more than all other countries in combination, according to federal statistics.
Carve gave an advantage to Chinese companies such as Shein and Temu, which carry millions of low -value packages directly to consumer doors each year. This ability to bypass invoices has helped Shein and Temu offer cheap prices, enhancing their popularity. According to the Congress Research Service, the two companies keep about 17 % of the United States’ e -commerce market for fast fashion, games and other consumer goods.
This has outraged traditional retailers, who usually bring large bulk missions to their warehouses for which they have to pay invoices. Retail traders such as Walmart and Amazon have encountered pressure to shift more to the TMU and Shein shipping model directly to consumers from China, which would mean that they were creating less jobs at US distribution centers.
Delivery express companies such as FedEx and UPS that fly many of the Pacific packages from China have also spoken in favor of maintaining the de Minimis exemption.
But Trump’s administration focuses on De Minimis’ targeting for another reason: his obvious bonds with Fentanyl trade. A White House official told a report with a journalist on Saturday that the forecast caused the United States to lose a huge amount of invoices and also preventing the efforts of customs officials to draw up the Fentanyl missions.
A group of law enforcement, commercial and drug prevention teams sent a letter to Mr Trump last month asking him to terminate the exemption of trade, saying that “it is flooding the United States with Fentyl, Fentainli precursors, pills and other illegal pills China and other countries. ”
The issue has been penetrated for years, but efforts to limit or end prediction have recently gained dynamics. Legislators examined De Minimis’s rule legislation and Biden’s administration proposed changes last year, which would limit the exception when they came to China but have not yet come into force.
Congress’s proposals to change the de minimis would have maintained an exemption for international travelers who bring up to $ 800 markets abroad in the United States in their luggage, allowing them to avoid customs statements and pay duties at US airports and other points of entry to the United States.
On the contrary, Mr Trump’s executive commands have not mentioned any reference to the maintenance of De Minimis’s exemption for people entering the United States. Depending on how customs officers handle it, who could complicate the entry into the United States starting Tuesday for people traveling from Canada, Mexico or China.
Timothy C. Brightbill, a Wiley Rein lawyer, said the change in Trump administration would “have a wide impact on many businesses and industries”. He said that a variety of import industries had “abused” the provisions of the de minimis and the elimination of the vacuum would be in line with the president’s goal of tackling puddle missions.
The Chinese Ministry of Commerce had no answer on Monday to questions about Mr Trump’s decision. Shein and Temu also did not respond to a request for comments. A spokesman for the Chinese Embassy said that China was steadily opposing the imposition of invoices and that there was no winner in a trade war.
Congress has put the de Minimis exemption in 2016 in $ 800 out of $ 200 in response to complaints from US customs officials who are already fighting to examine all the packages to come. The United States has increased every year.
Since many Americans buy such packages, change will also come at a financial cost. The research has found that the elimination of the de minimis exemption would completely result in the cost of $ 11 billion to $ 13 billion for US consumers and disproportionately harm to the poorer households.
Amit Khandelwal, an economist at Yale University, who is the author of a commercial study study, said his research found that lower income Americans spent a disproportionate amount to De Minimis missions and imports from China compared to China compared to the richest consumers.
“People with lower incomes will be more hurt,” he said. “Domestic retailers, domestic producers, will obviously benefit from taxing these imports, but there is a cost.”
Jim Marcum, chief executive of his bridal David, said the suspension of the “de minimis” provision was a “pure positive” for US companies because it would “balance the field of competition”.
Last year, David’s wedding dress paid an average task of 23.5 %, while the Chinese competitors who sent customers directly were able to avoid it. If Mr Trump proceeds by imposing an additional 10 % invoice on Chinese products, David’s wedding dress, which takes about half of his clothing from China, will have to pay a 33.5 % invoice. But now his competitors would also be, he said.
‘I think this tie of the game is amazing for US businesses, “Mr Marcum said in an interview.” I think it will help the economy over time. “
The termination of the de minimis exemption will lead to another interesting change: official US trade with China and US trade deficit will increase immediately. De Minimis missions do not appear in the typical commercial data released from the inventory.
The change will mean that perhaps the $ 100 billion trade will no longer be missing from official statistics, said Brad W. Setser, an economist on the Council for Foreign Relations. “Brings the shadow trade behind the shadows.”
