The United States will cancel the $800 import tax exemption policy!

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According to a report on the website of the Wall Street Journal on April 6, the U.S. market will severely crack down on an import method favored by Chinese cross-border e-commerce platforms such as Temu and SHEIN.

Cross-Border Knowledge learned that this method once allowed cheap clothing from China to flow into the United States duty-free and almost without censorship. But now, as part of a wider trade enforcement strategy, small parcels will come under greater scrutiny!

According to reports, the U.S. Department of Homeland Security said on April 5 that “small value exemption” shipments, that is, low-value packages that are usually sent directly to U.S. consumers, will be subject to stricter scrutiny, including investigating whether imported goods violate some U.S. regulations.

The U.S. Department of Homeland Security stated that the operation announced on the 5th will “expand the scope of targets” to conduct laboratory testing and key law enforcement operations.

The report pointed out that since packages worth less than US$800 sent directly from abroad do not need to pay tariffs, US Customs will not strictly examine them. As a result, the number of such packages sent to the United States has surged in recent years.

About 1 billion such packages will enter the United States this way in 2023, most of them from China. One report said Temu and SHEIN most likely accounted for nearly a third of small-value exempt shipments.

Temu has previously said that accusations that it uses forced labor are unfounded and that the company’s development does not rely on “small exemptions” clauses. SHEIN has also stated that the company has “zero tolerance” for forced labor and that the “small exemption” clause is not the key to its success.

Why does this policy need to be changed?

It is worth noting that the new “minimum” rules proposed by the United States may cause countries to pay different tariffs on goods imported into the United States, and some countries may even lose this right completely.

Under the current Trade Facilitation and Trade Enforcement Act, the minimum tax threshold for U.S. imports is set at $800. However, U.S. lawmakers have been seeking to reform this provision in recent years, particularly affected by the issue of tax exemptions for low-value e-commerce imports. According to the Wall Street Journal, the resulting tax losses amounted to approximately $67 billion.

Republican Congresswoman Maria Elvira Salazar formally introduced the Americas Act on March 6, providing clear direction for the new minimum rules.

The bill promises $14 billion in financial support to domestic textile manufacturing to incentivize nearshoring. The bill’s sponsors propose raising taxes to fund nearshoring by adjusting the minimum tax rate.

Although the Americas Act is still in its early stages and has not yet been fully reviewed and voted on by the U.S. legislative system, calls for lowering the $800 minimum threshold are growing.

A person familiar with the U.S. e-commerce industry said: “If the bill is passed, it will have a profound impact on importers and e-commerce logistics providers. To ensure that goods can avoid the minimum threshold, more regulations may appear.” Creative declaration’, and import business (especially air freight) will bear the brunt of the impact.”

However, the source also pointed out that since the presidential election in November has made U.S. politics full of uncertainty in the short term, there is doubt that the bill can be passed smoothly.