According to AP, the administration of US President Joe Biden is trying to control the expansion of cheap products sold on Chinese e-commerce platforms to reduce dependence and protect emerging industries such as electric vehicles from competition from Beijing.
The US also wants to limit China's access to technology to produce advanced computer chips.
By taking advantage of the US Trade Act's "de minimis" duty exemption for shipments worth less than $800 imported into the US, Chinese businesses - including Temu - can ship large quantities of goods in small packages to American consumers.
The number of packages under $800 jumped from 140 million to 1 billion last year, according to a White House statement. The “de minimis” exemption has also raised concerns about creating loopholes for prohibited goods such as narcotics to enter the U.S. market.
Most of the packages costing $800 or less come from China, according to U.S. Customs and Border Protection data. The U.S. Department of Homeland Security says it is impossible to screen the 4 million duty-free packages that enter the U.S. every day.
Under a new rule proposal released by the Biden administration in mid-September, foreign companies would no longer be able to avoid tariffs simply by saying that goods shipped into the United States cost $800 or less.
Small packages would also have to contain product tariff codes and other information to help identify suspicious shipments, under another proposal.
The goal of the proposed new rule is to reduce the number of small packages to a manageable level to help customs officers conduct better screening procedures, a senior US official said.
Although the proposals must undergo a public comment period before they can be finalized and implemented, 126 House Democrats are calling on President Joe Biden to use his executive authority to close the “loophole” that they say poses a danger to American workers, manufacturers and retailers.
Temu is a cross-border online shopping platform owned by China's leading conglomerate PDD Holdings. Temu first launched in the US in September 2022 and has entered the e-commerce market of many countries around the world.
