New Biden tariff rule: a paper tiger for a reason.

Photo via Reuters

AAYAN ALI: In late September, the Biden administration proposed a change to a rule that affects much of America’s imports from China. Although this is a fine policy on paper, it is flying under the radar. Did electoral politics make the Biden administration—like that of Trump—water down some ambitions and amplify others?

The de minimis rule allows some low-value shipments to enter the United States without being subject to tariffs at the border. It attempts to reduce the burden of enforcing tariffs by obviating the need to collect a tariff on each small, relatively inconsequential shipment that enters the country. 

Instead of being a small carve-out, de minimis has become a significant channel for Chinese goods to enter the United States, as over a billion shipments claim the exemption annually. The White House stated that this large volume of shipments is impossible to screen for illegal or unsafe products, making it easier for cheap Chinese products to harm U.S. industry.

The Biden administration’s new rule will remove the exemption for most tariffs levied on these small shipments. This move will likely have a significant impact on Chinese textiles and apparel and other small shipments that come from Chinese e-commerce platforms such as Shein and Temu. 

America’s recent swing towards tariffs began six years ago when Trump placed tariffs on Chinese products to correct for allegedly unfair trade practices by the Chinese government, as well as tariffs on foreign steel and aluminum. The Biden administration has extended these tariffs and imposed various new duties. They also reviewed the effectiveness of Trump’s 2018 tariffs and determined that they were effective in correcting the Chinese government’s allegedly harmful trade practices. 

Both administrations’ trade policies have been met with strong criticism and retaliation. However, the narrowing of de minimis has not been a major subject of dispute. Shein chairman Donald Tang said in an interview that he would be “very happy to embrace” the end of de minimis, claiming that if it is eliminated, “we’re going to find different ways to satisfy our customers.” And the Chinese government has yet to issue a response to this policy change.

One can conjure up many reasons why this measure is not receiving intense backlash. Perhaps the Chinese government and Chinese companies see this measure as unenforceable. They may recognize the immense difficulty that Customs and Border Protection would have screening each shipment that falls below the current $800 de minimis threshold. Border laws are already difficult to enforce with hamstrung resources. Customs may very well allow some small shipments to slip through the cracks.

Alternatively, China may recognize how permeable the American economy is to Chinese goods. Chinese companies may simply try “transshipment” by funneling products to the United States through other countries and tampering with “country of origin” labels, thus circumventing American tariffs. 

More convincing: that the new de minimis rules can’t touch the sheer competitive advantage that companies like Shein and Temu enjoy. American consumers flock to Shein and Temu because of their convenience, and it’s likely that their steadfast love for cheap, convenient goods will remain unfazed by a small increase in prices. Herein lies the truth about these new measures: they do not bite Chinese producers where it hurts, and that’s for a reason. 

If the Biden administration truly wanted to protect American industry, it could have coupled its narrowing of de minimis with higher tariffs on Chinese e-commerce products. However, that would have been patently unpopular with voters, as prices for their favorite products would sharply rise. Sure, Trump is proposing a blanket 10-25% tariff that would greatly hurt consumers’ buying power, but people vote their current pocketbooks, not their future ones. To avoid blame this November at the polls, the Biden administration crafted a paper tiger de minimis measure that avoids hurting consumers, leaving Shein and Temu’s competitive advantage untouched. 

Here, we see the duality of trade policy in 2024 politics. Harris and Trump campaign in the Rust Belt on imposing stronger tariffs to bring back manufacturing, but when a trade policy, such as these de minimis measures, can achieve similar goals without courting Pennsylvanians and Michiganders, they have no incentive to carry forward with a hard-hitting measure. Politics usually motivates bold moves on trade that can be brought up on the campaign trail, but in this case, it’s keeping things mellow.

Aayan Ali is a staff writer for On The Record. He is a freshman in the Walsh School of Foreign Service currently undeclared, but planning to study International Political Economy or Global Business. He is originally from Glenview, Illinois.