The US-China Economic and Security Review Commission, which is tasked with investigating and assessing China’s trade behaviors and reporting on inherent risks to American interests, is urging lawmakers to eliminate the de minimis trade provision for imports sold through online marketplaces originating from China.
The commission released its annual findings and recommendations on Tuesday, sharing its deepening anxieties about China's influence on the US consumer and manufacturing markets.
The Commission recommended that Congress:
- Fully eliminate the de minis trade provision, which offers duty free imports under $800 in value, that are sold through Chinese marketplaces amid a “rapid escalation of e-commerce sales” originating from the country.
- Revoke China's permanent normal trade relations (PNTR) status, which has been in place since the country joined the World Trade Organization in 2001 and has afforded the country the same benefits and trade terms as US allies for more than two decades.
- Dig into the operation of the US – Mexico – Canada Trade Agreement to determine whether it has inadvertently facilitated the transportation of Chinese products over the border via these countries acting as intermediaries.
If China's PNTR status is revoked, Commissioner Jacob Helberg said it would give President Trump the “the flexibility to recalibrate America’s trading relationship with China” in light of its failure to comply with its WTO commitments. This could potentially lead to annual reviews of China's trade practices and the introduction of new tariffs, which Trump has been promising.
Helberg noted about the fashion industry:
“We’re not going to have a fashion industry across the West if we keep these types of loopholes. It’s very clear that platforms like Shein and Temu shop around the world to different fashion brands, steal all the designs and then ship copycats of these products in three days, tax-free, to customers around the West… And so we can either have a fashion industry or we can have de minimis, but we probably can’t have both.”
The US currently takes in more than 4M de minimis packages each day, most of which originate from China.