The very same day Vice President Kamala Harris slammed Donald Trump's plan to institute new tariffs on products Americans buy from abroad as a "Trump sales tax," the Biden administration dropped... new tariffs on products Americans buy from abroad.
On Thursday, the White House announced new measures - largely aimed at Chinese e-commerce platforms such as Temu and Shein - aimed at reducing the range of low-value imports eligible for duty and tax exemptions. The new tariffs expand on Trump-era tariffs on China that the Biden administration kept in place, SCMP reports.
In 2018, then president Donald Trump imposed tariffs of 7 to 25 per cent on US$300 billion of Chinese imports under Section 301 of the Trade Act of 1974, citing “unfair” trade practices.
His successor Joe Biden retained most of these tariffs and expanded them to include Chinese solar panels, electric vehicles and batteries – with tariffs on electric vehicles reaching up to 100 per cent. -SCMP
According to US deputy national security adviser for international economics Daleep Singh, the measures will address the 'de minimis rule,' which exempts shipments valued at less than $800 from import duties, taxes, and rigorous screening.
"Since approximately 70 per cent of Chinese textile and apparel imports are subject to section 301 tariffs, this step will drastically reduce the number of shipments entering through the de minimis exemption," said Singh, adding that the intent was to "curtail de minimis overuse and abuse."
The new tariffs are built on existing measures under Section 201 of the Trade Act and Section 232 of the Trade Expansion Act of 1962, which covers industry, national security and human rights concerns. The now-plugged de minimis exemption has long been considered a "loophole" that allows Chinese e-commerce companies and fentanyl traffickers to evade tariffs and threaten public safety, according to the report.
Last June, a House Select Committee report on the CCP concluded that Temu and Shein alone are likely responsible "for more than 30 per cent of all packages shipped to the United States daily under the de minimis provision."
According to a fact sheet released by the Biden administration, the number of annual shipments coming into the US under the de minimis rule has gone from roughly 140 million a decade ago to over 1 billion as of last year.
"That is just too high a volume for our officials to be able to target and block the shipments that are unsafe, illegal, or violate our laws in any other way, or are unfairly traded," said a senior Biden administration official, who added "We are very concerned about large foreign companies exploiting the de minimis loophole in unprecedented ways, creating a scale and volume that we believe constitutes abuse."
To ensure greater visibility into de minimis shipments, the US government also proposed new information collection requirements and stricter safety standards. Products that do not meet these standards will be blocked from entering the market.
Singh emphasised that the Biden administration will “always act” to protect Americans and enforce laws to “level the playing field for American workers, retailers and manufacturers”.
“We’re making sure foreign companies respect our laws and don’t endanger American families,” he said. -SCMP
Singh also suggested that Congress should pass legislation to "comprehensively reform" the de minimis exemption.
In August, a bipartisan group of lawmakers targeted textiles and clothing in a new bill.
"We’ll be specific about textiles and apparel, because they make up a huge percentage of the de minimis shipments that we’re seeing now," the senior official told SCMP. "There may be others, and this is an area where we’d really like to work with Congress to figure out, how do we make sure that any changes we’re taking or making to de minimis now take into account how trade volumes might shift in the future."
Looks like the "Trump sales tax" works?