The Wall Street Journal - This ‘Loophole’ Lets $54B of Products Into the U.S. Tariff-Free | WSJ Center Point
The Yiwu International Trade Market, the world's largest wholesale market, is a key source for low-cost Chinese goods sold on platforms like Temu and Shein. These goods have been entering the US tariff-free under the de minimis provision, which allows shipments under $800 to bypass tariffs. This has significantly boosted exports from Yiwu, with $54 billion worth of products shipped to the US in 2023 alone. However, recent US policy changes under President Trump have removed this exemption, imposing new tariffs and customs checks on Chinese imports. This move aims to curb the influx of cheap Chinese goods that undercut US businesses but may lead to increased costs for American consumers. Critics argue that while the policy change targets Chinese e-commerce platforms, it may not stop the flow of goods, as companies could find alternative routes to continue their operations.
Key Points:
- Yiwu Market is a major source of low-cost goods for US e-commerce platforms like Temu and Shein.
- The de minimis provision allowed tariff-free entry of shipments under $800, boosting Chinese exports to the US.
- New US tariffs remove this exemption, potentially raising prices for American consumers.
- Critics argue the policy may not stop Chinese imports but will increase costs for US consumers.
- The trade tensions could lead to alternative shipping strategies by Chinese companies.