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Home » Imports Surge Under U.S. Trade ‘Loophole’ Surge

Imports Surge Under U.S. Trade ‘Loophole’ Surge

The outside of a SHEIN e-commerce distribution center can be seen in Whitestown around November 2022. Photo: iStock.com/jetcityimage
A SHEIN e-commerce distribution center in Whitestown, Indiana, November 2022. Photo: iStock.com/jetcityimage
March 4, 2024
SupplyChainBrain


U.S. lawmakers are calling for a crackdown on the special trade provision that was designed to make life easier for U.S. residents when they return from abroad and bring souvenirs without paying duty. Instead, the loophole has allowed e-commerce giants Temu and Shein to flood the country with cheap imports by paying no duty on them.

The Wall Street Journal says shipments using the customs de minimis rule are surging this year, with at least 485 million packages entering the U.S. so far this fiscal year, looking to easily outnumber the 685 million packages that were counted in the entire previous fiscal year.

Under the provision, packages with contents under $800 in value can enter the country duty free under a simplified procedure. Critics say that is helping companies sidestep tariffs and defy bans on imported goods made with forced labor. A House panel estimates that Temu and Shein alone account for about a third of all de minimis shipments.

Meanwhile, freight industry officials say the trade has turned the two companies into major forces in trans-Pacific airfreight markets.

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