Fri Sep 13 13:35:58 UTC 2024: ## Biden Administration Cracks Down on Cheap Chinese Imports, Potentially Raising Prices for Consumers
**WASHINGTON (AP)** – The Biden administration is taking aim at cheap goods flooding into the US from China, aiming to reduce the country’s reliance on Beijing and boost domestic manufacturing. However, this move could lead to higher prices for American consumers who rely on popular online retailers like Temu and Shein for affordable products.
President Biden’s proposed rule seeks to eliminate a loophole allowing foreign companies to avoid tariffs by shipping goods valued at $800 or less. This “de minimis” exemption has been exploited by Chinese sellers, particularly, to send clothing, shoes, toys, and bags directly to US shoppers in small packages. The number of these shipments has surged from 140 million annually to over 1 billion in 2023.
The US government argues that the exemption also hinders efforts to block banned imports like fentanyl and synthetic drugs, raising concerns about unsafe and illegal products entering the country.
The move comes at a time of heightened economic tensions between the US and China. The US has been working to decrease its dependence on Chinese goods, protect emerging industries from Chinese competition, and restrict China’s access to advanced technologies. China, meanwhile, relies heavily on manufacturing and exports for its economic growth.
The Biden administration’s proposal echoes a bipartisan push in the House of Representatives to target China. However, the House failed to pass a bill to significantly narrow the de minimis exemption, prompting 126 House Democrats to urge Biden to use his executive authority to close the loophole.
While welcoming the administration’s proposal, Democratic Representatives Earl Blumenauer and Rosa DeLauro stressed that it is merely a first step and that Congress needs to enact comprehensive solutions. The White House also called for legislative action.
China is the primary source of retail packages entering the US, accounting for the majority of those valued at $800 or less. Homeland Security Secretary Alejandro Mayorkas has acknowledged the difficulty in screening the 4 million packages entering daily under the exemption, calling it “built on a false premise” that low value equals low risk. Customs workers have seized narcotics, ghost guns, and other contraband from these smaller shipments.
The proposed regulatory changes would introduce stricter standards for smaller shipments, including mandatory 10-digit tariff classification numbers and details on the person claiming the exemption.
The proposal has garnered support from various US groups, including law enforcement and manufacturers, who see it as a crucial step to protect American workers and consumers. However, international shippers like FedEx, UPS, and DHL, as well as retailers like Amazon and Walmart, have defended the exemption, arguing that it benefits American consumers and small businesses by keeping prices low.
The impact on Chinese e-commerce companies like Temu and Shein, which rely on low prices to compete, could be significant. Temu maintains that its business model is efficient and allows it to pass savings directly to customers. Shein, meanwhile, emphasizes its compliance with all import requirements and supports responsible reform of the exemption rule.
The proposed rule will undergo a public comment period before being finalized, a process that the Biden administration will need to complete before its term ends. The outcome of this initiative will likely have a substantial impact on the US-China trade relationship and the cost of goods for American consumers.
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