Temu Shifts US Sales to Local Sellers Amid Duty-Free Rule Changes

7128

In a significant move, online marketplace Temu will transition its US sales model from direct shipments from China to a network of locally-based sellers. This strategic shift comes in response to evolving trade regulations and the closure of a duty-free exemption that previously allowed low-value packages to enter the US without tariffs.

Temu’s decision reflects an adaptation to the changing landscape of international trade, particularly concerning the “de minimis” exemption, which had allowed the duty-free entry of parcels valued under $800. This exemption, while streamlining customs processes, has faced criticism for allegedly harming American businesses and facilitating the smuggling of illicit goods.

What’s Changing?

Instead of shipping directly from China, Temu will now rely on US-based sellers to fulfill orders within the country. This strategy aims to support local merchants by providing them with access to a broader customer base and growth opportunities on the Temu platform.

“All sales in the US are now handled by locally based sellers, with orders fulfilled from within the country,” Temu stated. “The move is designed to help local merchants reach more customers and grow their businesses.”

The End of the De Minimis Loophole

The de minimis exemption, rooted in a 1938 Congressional act to minimize the cost of collecting small import levies, has been a boon for Chinese online retailers like Temu and Shein. It enabled them to offer ultra-low prices, attracting millions of US customers. However, both the Trump and Biden administrations have scrutinized the loophole.

In February, a brief suspension of the exemption caused significant disruption. The current move is aimed at curbing the illegal importation of synthetic opioids, with authorities claiming that deceptive practices are used to conceal illicit substances within low-value packages.

Impact on Consumers and Businesses

The shift away from the de minimis exemption is expected to impact online shoppers. Packages from China and Hong Kong valued up to $800 may now face higher taxes or fees. Experts predict that eliminating the exemption could lead to increased costs for consumers.

While the move is intended to protect American businesses and combat illegal activities, concerns remain about its potential impact on border authorities and the flow of goods. Some experts argue that it may not effectively address drug smuggling and could overburden customs officials.

Global Implications

The US isn’t alone in re-evaluating its approach to low-value imports. The UK has also announced a review of its rules, and the European Union is considering scrapping duty-free exemptions for parcels worth less than €150. These changes signal a broader trend toward stricter regulation of international e-commerce.

Keywords: Temu, de minimis, US trade, China, tariffs, online shopping, import taxes, e-commerce, Shein, trade regulations

Content