Goodbye Cheap Fakes! Your Temu and Shein Orders Will Cost More
For years, US shoppers have enjoyed cheaper shopping through popular Chinese online marketplaces like Temu and Shein, which offer low-value goods and quick shipping to the U.S. without duty fees. This was possible because of the de minimis exemption. However, a new executive order signed by President Donald Trump will end the exemption for most shipments, resulting in higher prices for these products.
A Major Trade Loophole and Risk
The de minimis exemption has been a key factor in importing inexpensive items—ranging from phone accessories to apparel and furniture—from abroad without paying import levies. This provision applied to goods valued at $800 or less, saving shoppers significant amounts of money on import fees.
However, the duty-free provision has been illegally used and abused. The US administration claims that this has undercut domestic businesses and that it has become a trade loophole for synthetic opioids like fentanyl to illegally enter the country in large quantities.
Signed on Wednesday, July 30, the executive order will revoke the de minimis exemption for commercial shipments globally, effective August 29. Beginning on this date, orders valued at $800 or less, shipped through means other than the international postal network, will be subject to duties, regardless of the country of origin.
This move follows the separate suspension of the de minimis exemption for goods coming from China and Hong Kong, which has been in effect since May 2.
Many Cheap Products Are Not Safe for Use
According to a Reuters report in February, more than half of the daily shipments under de minimis originated from China and Hong Kong, with over 30% of these shipments coming from Temu and Shein. The upcoming executive order will further expand this effect to more countries.
The actual duties for each shipment will vary depending on the country. They will be computed as either an ad valorem duty (equal to the tariff rate for the country of origin) or a specific duty ranging from $80 to $200 per item. It is important to note that this is per item and not per package.
Beyond the security and economic effects cited by the U.S. government, there were also concerns relating to consumer health and safety. Many products from these international retailers are counterfeits, lack regulatory approvals, and are not safe for use. This means that even some consumers who spent more may not have actually gotten good value from their purchases. A related investigation launched by the European Union also highlighted health risks from these items.
From what it stands, the effect on consumers is that they will be forced to pay more to cover the taxes or perhaps opt to source the products they want domestically, but at higher prices.
Have you tried ordering from these online stores before? What was your experience with the items? We'd like to hear your thoughts.
Via: Forbes
