The Biden administration on Friday issued last-minute proposed rules to curb duty-free imports under the $800 "de minimis" threshold, denying the low-value shipments exemption for goods that are subject to other punitive U.S. tariffs.
The move marks a setback for e-commerce firms, including China-based Shein and PDD Holdings' (PDD.O) Temu, which have exploited the de minimis threshold to ship millions of small packages a day to U.S. customers.
The Biden administration first announced in September that it was taking steps to curb the trade "loophole" that it blames for shipments of fentanyl precursor chemicals to evade customs inspection and tariffs.
U.S. Customs and Border Protection agency said the proposed rules would deny duty-free exemptions to low-value packages containing goods subject to Section 301 tariffs on hundreds of billions of dollars of Chinese imports, including many apparel items. They also would eliminate similar exemptions to goods subject to Section 232 tariffs on steel and aluminum and Section 201 duties on solar products.
In addition, small package shippers also will be required to include the 10-digit Harmonized Tariff Schedule classifications for the package contents in order to claim the exemption. The move will allow customs officials to better identify and interdict illicit goods.
"We cannot let Chinese-founded e-commerce platforms gain an unfair trade advantage while American businesses play by the rules," National Economic Advisor Lael Brainard said in a statement.
"Today’s actions are an important step forward to level the playing field for American workers, retailers, and manufacturers and to enforce U.S. laws that protect the health and safety of our consumers."
