Two US senators pushing for crack down on the number of packages from China that enter the country duty-free have called on President Joe Biden to take executive action. In a letter, the senators said that the US manufacturers can’t compete with low-cost competitors they say rely on forced labour and state subsidies in key sectors.
This is similar to the major crackdown by the Indian government on online purchases of goods from Chinese e-commerce platforms that were escaping customs duty and goods and services tax in 2019.
Many Chinese e-commerce platforms were shipping goods ordered by Indians to various cities claiming these were “gifts”. As per the domestic laws, any gifts received by Indians up to Rs 5,000 don’t attract any taxes.
The clamp down was announced after there were reports that the Chinese retailers such as
Club Factory
, AliExpress and
Shein
were taking undue advantage of the exemption from customs duties on gifts of up to Rs 5,000. “It is often brought to the notice that authorised registered couriers are outsourcing activities without prior permission from or intimation to customs.. and without exercising necessary due diligence and checks,” an official communication by customs department reads.
The Indian government in June 2020 banned these Chinese shopping apps along with some 50 other apps across categories.
What US senators are complaining
According to a report by news agency AP, US trade law allows packages bound for American consumers and valued below a certain threshold to enter tariff-free. That threshold, under a category known as “de minimis,” stands at $800 per person, per day. The majority of the imports are retail products purchased online. This is similar to the Rs 5,000 limit that is there in India.
The report says that alarmed by the large increase in such shipments from China, lawmakers in both chambers have filed legislation to alter how the US treats imports valued at less than $800. Now, Sens. Sherrod Brown, D-Ohio, and Rick Scott, R-Fla., have sent a letter to Biden calling on him to end the duty-free treatment altogether for those products.
“The situation has reached a tipping point where vast sections of American manufacturing and retail are at stake if de minimis is not immediately addressed,” the senators wrote.
Chinese apps named in the US 'ban letter'
Brown and Scott have named Temu, Shein and AliExpress in their letter as companies that “unfairly” benefit from the duty-free treatment of their goods. The surge in shipments, they said, hurts big box stores and other retailers in the U.S.
“This out-of-control problem impacts the safety and livelihoods of Americans, outsourcing not only our manufacturing, but also our retail sectors to China, which — as you know — systematically utilizes slave labor among other unconscionable practices to undermine our economy,” the senators said.
English (US) ·