🛒 Unsafe baby products spark investigation
On Sep 4, 2024, U.S. CPSC commissioners Peter Feldman and Douglas Dziak urged an investigation into Shein and Temu. The call came after both platforms sold "deadly baby and toddler products." These items were found to be dangerous and have sparked significant concern among U.S. regulators. Feldman and Dziak expressed worry about how these foreign-owned companies comply with U.S. safety regulations.
🇨🇳 Foreign platforms under scrutiny
Shein, based in Singapore, and Temu, owned by China's PDD Group, have been highlighted for their use of third-party sellers. According to the CPSC, the companies need to clarify how they manage these sellers and ensure product safety. Concerns also focus on how imported goods are represented to American consumers, especially when some of these products have not undergone proper safety testing.
📦 Exploiting the de minimis rule
The controversy over Shein and Temu also ties into the de minimis rule. This regulation allows products valued under $800 to be exempt from tariffs if shipped directly to consumers. Critics argue this loophole enables foreign companies to flood the U.S. market with cheap, sometimes unsafe goods. Shein and Temu have both benefited from this rule, contributing to their rapid success in the U.S. market.
🏛 Lawmakers push for reform
A bipartisan group of U.S. lawmakers has been working to eliminate the de minimis rule, specifically citing platforms like Shein and Temu. While e-commerce giants like Amazon and Walmart also benefit from this rule, the focus is on foreign sellers. A new bill could severely impact Shein and Temu’s business models, as it would remove the tariff exemption that makes their products so affordable in the U.S.
Should de minimis exemptions for cheap imports be eliminated?
