New Biden proposal targets Shein and Temu for 'abuse'

With just just a few months left in his presidential term, U.S. President Joe Biden wants to cement his legacy by implementing and advancing his pro-consumer protection agenda.

Biden's presidential tenure has prioritized protecting American shoppers by proposing and implementing consumer-benefiting rules and regulations.

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Alternatively, Chinese online retail giants like Shein and Temu appear to have found a loophole to get away with warding off a U.S. pro-consumer trade rule.

A battle of prominent two world economies

As a consequence of the U.S. and China being two of the world's largest economies, The U.S. has tried to diversify its supply chain by minimizing its reliance on Chinese products.

Alternatively, there seriously is really not a rule that prohibits U.S. citizens from individually purchasing goods made in China.

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In step with a White House statement, the variety of shipments from foreign places to the U.S. that steer clear off the trade tariffs increased from A hundred and forty million to over one billion items annually.

The de minimis rule allows packages shipped from foreign countries to enter the U.S. without paying import duties and processing fees as long because the package does not exceed $800 per day for each and every recipient.

This rule is intended to give protection to American consumers, workers, and businesses by concentrated on and blockading foreign shipments that contain unfairly traded or unsafe products that violate U.S. laws.

Shein and Temu stumble on a loophole

For years, Shein and Temu (PDD) have steer clear off paying extra tariffs to the U.S. on their Chinese-originated shipments by formulating a business model that facilitates this execution.

Since the e-commerce giants' products are sold at very low prices, the shipments don't in most cases exceed the $800 limit per customer, which allows them to keep away from extra import costs and, in turn, increases their profits.

Previous investigation raises suspicions against Temu and Shein

In June 2023, the Make a selection Committee released findings from a Forced Labor Investigation against Shein and Temu.

In step with the investigation, 685 million shipments entered the U.S. lower than de minimis in 2022, with more than 30% of all packages coming from Shein and Temu by myself.

In 2022, not lower than sixty two% of all de minimis shipments entering the U.S. originated from China, of which approximately 0.5 are suspected to come again from Shein and Temu.

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The investigation discovered that Shein and Temu exploited the de minimis rule by evading customs enforcement because they made sure their shipments were lower than $800.

In step with the findings, Temu has no system in its business model to make certain its compliance with the Uyghur Forced Labor Protection Act (UFLPA), which prohibits the entry of forced labor goods from China into the U.S.

"All companies operating at some point of the United States have an obligation to clean up their supply chain and make certain they should not any longer contributing to the CCP’s genocide of the Uyghur people by facilitating the sale of goods made with forced labor," said Chairman Mike Gallagher and Ranking Member Raja Krishnamoorthi from the Make a selection Committee on the Chinese Communist Celebration.

Biden's proposal to make Shein and Temu's mass retail empire fall apart

On Friday, the Biden administration announced a new rule proposition prohibiting the shipment of any product from China that applies to the U.S. trade tariff from attending to American customers without paying duty fees.

Additionally, it proposes as a replacement of tariffs for products covered by Sections 201, 232, and 301.

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