U.S. Moves to Block a Popular Tariff-Free Path for Chinese Goods

The Biden administration said it would clamp down on billions of dollars in small-dollar imports that ship directly to consumers.

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A pop-up store for Shein, the Chinese fast-fashion retailer, in Plano, Texas. Shein and similar online companies are likely to be the most significantly affected by the trade rule change.

The Biden administration announced on Friday that it was moving to drastically limit a trade rule that allowed more than a billion packages from China to enter the United States last year without being subject to tariffs.

The administration, which has kept stiff levies in place on Chinese products, said a flood of shipments under the rule had hurt American manufacturers and allowed fentanyl and counterfeit products to come into the country.

The trade rule, called de minimis, allows packages to be shipped from foreign countries directly to consumers or businesses without paying tariffs, as long as the shipments do not exceed $800 per recipient per day. The new proposal would strip that exemption from a wide array of products and most likely have a significant effect on large importers of Chinese goods such as Shein and Temu.

The de minimis provision stems from a century-old trade law and was originally intended for shipments that would be too trivial to require scrutiny from U.S. customs officials.

But in recent years, online companies like Shein — and some sellers of Chinese goods on Amazon — have used the provision to gain market share in the United States, shipping cheap clothing and other items directly from Chinese factories to consumers’ doorsteps. In addition to bypassing tariffs, the companies can eliminate costs for warehousing in the United States.

The number of packages entering the United States each year under the de minimis rule reached more than one billion in 2023, compared with 140 million a decade ago, according to federal statistics.

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