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The Biden administration’s move to close a loophole that allows low-value shipments to enter the US duty free won’t be a problem for Shein, executive chairman Donald Tang said in an interview Friday.
The conversation took place shortly after White House officials announced plans to crack down on a trade exemption for packages that fall under the $800 “de minimis” threshold. The provision was originally meant to make it easier for Americans to receive small parcels from abroad or bring home souvenirs from travels. But in recent years it’s facilitated a surge in trade from e-commerce companies like Shein and Temu, which ship direct to US consumers from China. Shares in Temu-owner PDD Holdings traded lower on the news.
But Tang said changes to the tax rules wouldn’t have a major impact on Shein’s market position. “Shein has a competitive advantage because of its on-demand model and not the de minimis rules,” Tang said. “The efficiency and the wide choice we provide gives the company not just a few points advantage, but a significant advantage.”
It’s unclear how quickly the rules in the US could change and there will be a period of consultation to give interested parties an opportunity to comment before they are finalised.
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Tang said Shein would like to see any changes reflect taxes on the wholesale price when goods enter the country, rather than on the retail price. “We look forward to working with all stakeholders on reform,” Shein said in a statement. Changes should create a “level, transparent playing field,” it added.
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US Looks to Curb Low-Value Chinese Shipments Under $800 ‘De Minimis’ Exemption
The White House announcement comes two days after Democratic lawmakers in Congress urged President Joe Biden to use executive powers to close the de minimis provision, which they called a “loophole” that has allowed Chinese imports to evade tariffs.
