This article is written by Austin Garcia
A U.S. legislative committee is looking into popular e-commerce platforms Shein and Temu for potentially violating tariff regulations and neglecting human rights standards. According to investigators, these companies rely on a little-known customs provision called Section 321—often referred to as de minimis—to ship numerous low-cost packages directly to consumers without paying import duties or undergoing detailed inspections. The threshold for these tax-free imports is currently set at $800 per shipment.
However, the days of “shopping like a billionaire” on Shein and Temu may be winding down. Under new trade measures announced by the White House, billions of dollars of Chinese imports could soon be subject to tariffs. Officials argue that the loophole not only harms American businesses by undercutting prices, but also opens the door to counterfeit products and potentially dangerous items, such as illicit drugs.
What Is Section 321 (de minimis)?
- Section 321 allows importers to avoid duties and inspections on packages valued under $800.
- Critics say it enables products made with forced labor—or even illegal goods—to reach U.S. consumers unexamined.
- Some American brands also use this approach to save money and speed up deliveries by shipping items directly from factories abroad.
Growing Pressure to Close the Loophole
Lawmakers from both parties have vowed to crack down on de minimis, pointing to reports that Shein and Temu together account for a substantial share of these small-value daily imports. An interim congressional report found that nearly half of all low-cost shipments came from China, and as much as 30% of de minimis shipments were linked directly to these two platforms. Authorities say the practice leaves too much room for oversight gaps.
While Shein and Temu insist their success does not hinge on the de minimis rule, many experts believe their ultra-low prices and quick turnarounds depend heavily on shipping items below the $800 limit. Meanwhile, smaller companies are also exploring this model. Some startups, like Portless, help U.S. brands fulfill orders directly from overseas factories, mirroring the same strategy used by these Chinese e-commerce giants.
Possible Impact of New Measures
If the White House proposal takes effect, items subject to certain tariffs will no longer qualify for the duty-free exception, even when valued under $800. This shift could:
- Force importers to consolidate orders into larger shipments, which would be easier for customs officials to inspect.
- Require them to pay additional fees and taxes, raising prices for consumers.
- Deprive fast-growing retail apps of the cost advantage that helped fuel their rapid expansion.
Government representatives argue the changes are necessary to protect national security and support American manufacturing. They also emphasize the importance of preventing forced labor in global supply chains, a concern that remains difficult to address when multiple small parcels bypass in-depth scrutiny.
What Comes Next
As officials tighten control over de minimis shipments, businesses benefiting from the loophole may have to redesign their logistics strategies. The White House has also floated additional data collection requirements to track low-value imports more effectively. Public feedback is being collected, and final decisions will likely follow soon.
In the meantime, Shein and Temu face mounting pressure to demonstrate compliance with labor laws and customs regulations. With new rules on the horizon, the era of carefree bargain shopping on these platforms may be coming to a close, as authorities push to ensure a level playing field for all retailers.
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