Surge in Duty-Free Packages from China Sparks Trade Concerns in the US

Duty-free packages from China are flooding into the United States, prompting concerns and calls for action from conservatives who see it as a trade priority.

Duty-free packages from China are surging into the United States. (Photo: China Daily Global Edition)

A Surge in Duty-Free Packages from China

Duty-free refers to the exemption from paying certain taxes or import duties on goods that are being brought into a country.

The issue at hand is the de minimis rule, which allows most imports valued at less than $800 to enter the US duty-free as long as they are addressed to individual buyers, The Free Press reported.

This rule has facilitated faster commerce and reduced costs for consumers while allowing Customs and Border Protection to focus on higher-value items.

However, the volume of duty-free imports from China has skyrocketed in recent years, with China accounting for about 60% of the 771 million packages in 2021.

Critics argue that the de minimis rule has become a loophole for foreign companies, potentially hurting domestic industries and employment.

Former US Trade Representative Robert Lighthizer has raised concerns about the influx of packages, urging Congress to eliminate or significantly lower the de minimis threshold. He argues that this loophole is being exploited, causing job losses in stores and manufacturing.

House Democrats previously tried to exclude Chinese-made goods from benefiting from this treatment, but the provision did not make it into the final bill due to opposition from US business groups and key Republican members of Congress.

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Bill to Reduce Duty-Free Packages from China

The political dynamic has recently shifted, with a new House committee focused on China recommending legislation to reduce the threshold for duty-free shipments.

The committee raised concerns about Chinese companies bypassing US laws designed to prevent the sale of goods made with forced labor.

It also highlighted the inability of Customs and Border Protection to effectively scrutinize the sheer volume of products coming in under the $800 threshold.

The committee singled out retailers Temu and Shein as major contributors to the influx of duty-free packages.

Both the House and the Senate are considering bills to address the issue of the surge of duty-free packages.

One bill would prevent the expedited treatment of imports from certain countries, including China and Russia, while another would reduce the threshold to match the amounts used by other nations.

Proponents argue that changes are necessary to protect domestic industries and jobs.

Opponents, including the US Chamber of Commerce, warned that reducing the threshold of duty-free packages would impose significant costs on small businesses and lead to supply chain disruptions.

They contend that the previous increase in the threshold in 2016 was a recognition of its benefits for the US business community and the impracticality of collecting duties on low-value shipments.

As the debate continues, finding a balance between facilitating commerce, protecting domestic industries, and addressing concerns about forced labor and unfair trade practices will be crucial.

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