President Donald Trump’s tariffs against China, Canada and Mexico are directed at a commercial provision that helped feed the explosive growth of budget retailers, including Temu and Shein.
Trump signed executive orders on Saturday that impose tariffs on the three main commercial partners of the country. The goods imported from Canada and Mexico will be slapped with a 25%tariff, while China’s assets will be charged 10%. Canada’s energy resources will have a lower 10%rate. Duties are expected to enter into force on Tuesday.
Orders against China, Canada and Mexico stop a commercial exemption, known as “Minimis”, which allows exporters to send packages worth less than $ 800 in the United States.
The provision of Minimis has existed since the 1930s, but its use has been under increasing scrutiny in recent years. The Biden administration took action last September to stop the “excessive use and abuse” of De Minimis, arguing that it has helped Chinese companies of electronic commerce to undermine competitors with lower prices. The authorities have also argued that minimis shipments are “subject to minimum documentation and inspection”, which increases product security concerns.
The United States processed more than 1.3 billion minimis shipments in 2024, according to data from the US Customs and Border Protection data. UU. That is 139 million a year in 2015, the CBP said.
Lagophole has allowed low -cost electronic commerce companies such as Temu, owned by PDD, Temu, Shein and Alibaba’s Aliexpress, all have links to China, to offer a virtual borgasbord of cheap clothing, domestic and electronic items, as $ 15 Smart watches and $ 3 of $ 3 shoes.
Shein and Temu have made a digital marketing bombardment in recent years in an attempt to attract more hungry buyers of offers. Temu in 2024 jumped to the upper part of the Apple list of the most downloaded free applications in the US. For the second consecutive year, while Shein reached number 12.
Representatives of Temu, Shein and Alibaba did not immediately respond to comments requests. Temu has previously denied that its growth depends on De Minimis.
Shein previously told CNBC that import compliance is a “priority.” Shein’s executive president Donald Tang also said he supports efforts to reform minimis, saying that he needs a “complete image change.”
His popularity in the USA. Uu. It promoted Amazon to launch its own offers, called Haul, last year that allows third -party vendors to send products to consumers directly from China. According to reports, Amazon is based on the commercial rule of Minimis to import items sold on the route to avoid rates, the information reported, citing people familiar with the program. A Amazon spokesman did not immediately respond to a request for comments from CNBC.
Amazon, Ebay and Etsy could benefit from the repression of the Trump administration on the Lagofol de Minimis. Companies operate online markets that allow third -party vendors to market products directly to consumers, directly competing with Temu and Shein.
Amazon has long connected Chinese manufacturers with American buyers through their extensive third -party market. The market is a key component of Amazon’s retail strategy, which represents approximately 60% of the products sold on the site. Amazon also generates rates when providing compliance, shipping, support and advertising services to vendors.
China merchants in China have constituted a considerable contingent of the Amazon market for many years, although the company first recognized in 2023 that they represent a “significant portion.” According to some estimates, they exceed American sellers on the platform, according to Marketplace Pulse data.
Temu and Shein have also expanded their strategies as the Minimis lagoon was threatened. Last year, Temu began to incorporate Chinese vendors in their place who have inventory in US stores, allowing him to send faster packages to American buyers, according to information. Shein has also opened distribution centers and a supply chain center in the United States
