The Biden administration on Friday announced measures that will add tariffs to tens of billions of dollars of products that the United States imports from China, a move intended to both protect American factories and project a tough-on-China approach ahead of the presidential election.
The tariffs will apply to clothing, solar panels, electric vehicles, syringes, steel and other goods that China has been selling at far cheaper prices than many American businesses, threatening to put U.S. factories out of business.
The steps are likely to raise the cost of some imports at a time when Americans are already dissatisfied with rising prices. But they also represent a major effort by the Biden administration to address a salient political issue for some voters: America’s dependence on China for an array of products.
Both Democrats and Republicans have turned away from emphasizing the benefits of freer trade to criticizing the role that Chinese imports have played in hollowing out American manufacturing and damaging the communities centered around those factories. This week, Vice President Kamala Harris sparred with former President Donald J. Trump over the impact of tariffs, and Republican lawmakers proposed several new laws aimed at reducing China’s economic influence.
One of the measures the Biden administration proposed would drastically limit a trade rule, called de minimis, that allowed more than one billion packages from China to enter the United States last year without being subject to existing tariffs. The administration said a flood of shipments under the rule had hurt American manufacturers and allowed products like fentanyl and counterfeit goods to come into the country.
The trade rule allows packages to be shipped from foreign countries directly to consumers or businesses without paying tariffs, as long as the shipments do not exceed $800 per recipient per day. The new proposal would strip that exemption from a wide array of products and most likely have a significant impact on large importers of Chinese goods such as Shein and Temu, two online marketplaces that have become popular with American shoppers.
The Biden administration on Friday also published a long-awaited review of the tariffs that the Trump administration placed on more than $300 billion worth of Chinese goods in 2018.
The report, which runs to 187 pages, concluded that the Trump tariffs had been effective in reducing U.S. exposure to harmful trade practices from China, and that they should be maintained.
It also said the Biden administration was adding or increasing tariffs on additional products from China, including electric vehicles, battery parts, medical gloves, graphite, semiconductors and other goods. They would go into effect on Sept. 27. The Biden administration put forward some of these additional tariffs in May, but this week’s report finalized those measures, as well as proposed additional levies on tungsten and solar products.
Katherine Tai, the United States trade representative, said in a statement that the levies would “target the harmful policies and practices of the People’s Republic of China that continue to impact American workers and businesses.”
The decision to formalize Mr. Trump’s tariffs and add new ones could put Ms. Harris in an tricky position given her criticism of the former president’s approach to China. Mr. Trump has said that, if elected, he would seek to impose even higher tariffs on China — as much as 60 percent — as well as a 10 percent to 20 percent tariff on imports from other countries. Ms. Harris has blasted that idea as a “national sales tax.”
At this week’s debate, Mr. Trump noted that the Biden administration had decided to keep his tariffs in place, saying: “She’s going to my philosophy now. In fact, I was going to send her a MAGA hat.”
The Biden administration’s changes collectively will add tariffs ranging from 7.5 percent to 100 percent to tens of billions of dollars of trade from China. The administration said in May that its new tariffs on electric vehicles and other products would cover $18 billion of Chinese imports.
The proposal to close the de minimis loophole also appears to apply to a substantial portion of U.S. de minimis imports, which totaled $54.5 billion last year. An economic study released in June found that eliminating de minimis entirely would result in costs of $12 billion to $14 billion for American consumers and particularly burden low-income and minority households.
The Biden administration’s measure, to be finalized after a public comment period, would eliminate de minimis protection for any product subject to tariffs under several legal provisions, including those that the Trump and Biden administrations have used to levy tariffs on global metals, foreign solar panels and a vast array of products from China. The administration said that the de minimis exemption would no longer apply to more than 40 percent of overall U.S. imports, as well as 70 percent of Chinese textile and apparel imports.
“The drastic increase in de minimis shipments has made it increasingly difficult to target and block illegal or unsafe shipments coming into the U.S.,” said Daleep Singh, the deputy White House national security adviser for international economics.
“This is about enforcing our laws,” Mr. Singh added. “We’re making sure foreign companies respect our laws and don’t endanger American families.”
The de minimis provision stems from a century-old trade law and was originally intended for shipments that would be too trivial to require scrutiny from U.S. customs officials.
But in recent years, online companies like Shein — and some sellers of Chinese goods on Amazon — have used the provision to gain market share in the United States, shipping cheap clothing and other items directly from Chinese factories to consumers’ doorsteps. In addition to bypassing tariffs, the companies can eliminate costs for warehousing in the United States.
The number of packages entering the United States each year under the de minimis rule reached more than one billion in 2023, compared with 140 million a decade ago, according to federal statistics.
Traditionally, to bring goods into the country, retailers would arrange for a shipping container of products to be brought to U.S. ports from China. They would then move the goods into warehouses or stores before selling them to consumers.
But companies are increasingly bypassing that step by shipping items directly to individual consumers. The shopper becomes the official importer, rather than the retailer or e-commerce platform, making it easy to keep the value of shipments under $800. Importers also do not have to provide as much information to U.S. Customs and Border Protection as with other packages.
The de minimis model has taken off in the past few years, since the Trump administration imposed tariffs on many goods retailers brought in from China through traditional channels. The surge in online ordering during the pandemic also helped to popularize such shipments, which now make up roughly a fifth of e-commerce orders. China is by far the biggest source for such packages, sending more than all other countries combined, according to the customs agency.
House Republicans had discussed taking up legislation to limit de minimis shipments in a package of bills targeting China this week, but they ultimately could not agree on which import measure to move forward. In recent years, lawmakers of both parties in the House and the Senate have proposed legislation to clamp down on de minimis shipments.
In a letter to the Biden administration on Wednesday, more than 100 Democratic lawmakers urged it to use “the full range” of its authorities to limit de minimis shipments.
On Friday, Representative Jason Smith, Republican of Missouri and the chairman of the Ways and Means Committee, claimed credit for the measure. He said that the Biden rule mirrored a law proposed by a Republican congressman and passed by the committee this year.
“They say imitation is the highest form of flattery,” he said, “so I am pleased Democrats in Washington are once again acknowledging that Republicans’ tough-on-China trade policy works.”
Both Shein and Temu have said that while they use de minimis, it is not core to their success. A Temu spokeswoman said the company was open to changes that helped consumers and that they would not affect the competitive landscape as long as they were fair.
Donald Tang, the executive chairman of Shein, said in an interview on Thursday that he would be “very happy to embrace” the end of de minimis. As long as it is there, “then we’re going to use the channel,” he said. But if it is eliminated, “then we’re going to find different ways to satisfy our customers.”
Groups including the U.S. Chamber of Commerce and shippers like FedEx and UPS have opposed the changes to de minimis proposed by lawmakers.
The National Foreign Trade Council, which lobbies on behalf of major importers, argues that getting rid of de minimis would create more work for Customs and Border Protection and cost American consumers billions of dollars annually, particularly burdening low-income households. The group also contends that eliminating de minimis would not do much to stop illegal substances from entering the United States.
“The only outcome here is that it’s a tax increase,” said John Pickel, the organization’s senior director of international supply chain policy. “It’s a collection of a small amount of money at a high amount of cost to the government.”
“It’s not going to improve the enforceability of U.S. trade laws at the border — full stop,” he added.
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