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Trump Targets Trade Loophole Utilized by Chinese Online Retailers Such as Temu and Shein with Tariffs


President Donald Trump recently signed executive orders imposing tariffs on China, Canada, and Mexico, targeting a trade provision known as “de minimis.” This provision allowed exporters to ship packages worth less than $800 into the U.S. duty-free, leading to explosive growth of budget online retailers like Temu and Shein.

The tariffs imposed by Trump include a 25% tariff on goods from Canada and Mexico, a 10% tax on goods from China, and a lower 10% tariff on energy resources from Canada. The orders against these countries aim to curb the abuse of the de minimis provision, which has been criticized for enabling Chinese e-commerce companies to undercut competitors with lower prices and raising product safety concerns due to minimal documentation and inspection.

The loophole has enabled companies like Temu, Shein, and Alibaba’s AliExpress to offer cheap apparel, household items, and electronics to American consumers. This has prompted Amazon to launch its own bargain outlet called Haul, benefiting from the de minimis trade rule to import items from China directly to consumers.

Amazon, eBay, and Etsy, which operate online marketplaces allowing third-party sellers to reach consumers directly, could stand to benefit from the clampdown on the de minimis loophole. Chinese manufacturers have long been a significant part of Amazon’s marketplace, accounting for a sizable contingent of sellers.

In response to the threat to the de minimis loophole, Temu and Shein have expanded their strategies, with Temu onboarding Chinese sellers with U.S. warehouses and Shein opening distribution centers and supply chain hubs in the U.S. Overall, the tariffs imposed by the Trump administration are aimed at leveling the playing field for American retailers and manufacturers by curbing the advantages enjoyed by low-cost foreign competitors.

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