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Temu, Shein Under Increased Pressure From US Lawmakers

Temu, Shein Under Increased Pressure From US Lawmakers
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US lawmakers are ramping up their pressure on e-commerce platforms like Temu, Shein, and AliExpress.

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In a letter sent to President Joe Biden on Friday, Senators Sherrod Brown and Rick Scott called on the administration to use its executive powers to end shipments under Section 321, also called “de minimis.”

The provision allows importers to avoid paying duty and tax on shipments that are going to individual consumers and are worth less than $800 in total. The de minimis loophole is frequently used by companies like Temu and Shein which are known for selling cheap goods directly from manufacturers in China.

Brown and Scott’s letter argues that de minimis shipments are “facilitating the import of illegal products, goods produced with forced labor, and other contraband to the detriment of U.S. manufacturers, workers, and communities.”

“The lack of U.S. Customs and Border Protection (CBP) inspection of small packages entering our country is causing a disproportionate application of tariffs on American businesses and is a contributing factor to the fentanyl crisis that is killing Americans and tearing families apart,” the letter continues. “Americans deserve better policy that closes this glaring and dangerous loophole and reestablishes basic customs principles for an overwhelming quantity of packages and goods entering the country.”

Brown and Scott point to US Customs and Border Protection statistics showing that more than 27,000 pounds of fentanyl were seized in 2023. There could be more coming in through uninspected packages shipped via de minimis, they argue.

Representatives for Temu, Shein, and AliExpress did not return Business Insider’s request for comment.

In January, spokespeople for Temu and Shein said that they have not relied on de minimis to grow and that they would support reforms to the provision if they are fair.

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An interim 2023 report from the US House Select Committee on the Chinese Communist Party said that Temu and Shein “likely” account for more than 30% of all shipments made to the US under the de minimis provision. It added that almost 50% of all de minimis shipments to the US come from China.

Shipping consultancy ShipMatrix estimates that Temu and Shein each ship more than a million packages to the US daily.

Some US retailers and trade groups have opposed de minimis out of a concern that the provision hurts their ability to compete with companies shipping cheaply from China. Many retailers manufacture their products abroad and then ship them to the US in large quantities, meaning they can’t use the de minimis provision as easily as Shein and Temu have.

“Every day, hardworking Americans who have made the great choice to support U.S. jobs and make products here in the United States are finding themselves with less of a competitive advantage over foreign manufacturers and suppliers that are gaming U.S. laws to avoid duties meant to protect U.S. companies and jobs,” Brown and Scott wrote in their letter. “This must be immediately addressed.”

Brown and Scott are not the only US lawmakers to advocate for change as Temu and Shein have gained a foothold. Two bills aimed at reforming de minimis were introduced in Congress last June.

The Information reported that US representatives have been pushing for Temu to be listed as a violator of the Uyghur Forced Labor Prevention Act, which would essentially bar the company from importing goods to the US. It would be the first e-commerce marketplace to be listed as such, according to The Information.

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Got a tip? Contact this reporter at mstone@businessinsider.com, mlstone@protonmail.com, or on the secure messaging app Signal at (646) 889-2143 using a non-work phone. 

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