US targets trade loophole used by ecommerce groups Temu and Shein

https://www.ft.com/content/2f07510b-d2c6-4bae-bae3-aa5dfa8bd796

by mfiguiere • 2 years ago

116 103 2 years ago

ft.com

cheschire• 2 years ago

https://archive.is/aGdbX

elashri• 2 years ago

DUPE [https://news.ycombinator.com/item?id=41533003]

breerbgoat2• 2 years ago

why is it that the Biden administration do these right things so freaking slowly? should have been done years ago. Just like allowing Ukraine to do certain things to defend itself.

Anyways, this would be good for consumers, since Shein and Temu products found to contain high levels of toxic chemicals https://www.lemonde.fr/en/international/article/2024/08/14/s...

mattmaroon2• 2 years ago

With the federal government the options are do things slowly or not at all.

mensetmanusman10• 2 years ago

Not true during crises, eg covid related manufacturing.

ziml773• 2 years ago

I just assume that any of this cheap unbranded garbage is filled with shit that's toxic. The Chinese companies making this stuff has no reason to care. They can't be held liable for anything.

BobbyTables2• 2 years ago

Why would Amazon be any different in practice?

Being a US company doesn’t stop them from being filled with imitation/knock-off goods from fly by night companies.

ungreased0675• 2 years ago

I’ve been hearing about this for years. I have to assume it’s intentionally not being changed. Qui bono?

bruce5113• 2 years ago

The problem with closing loopholes that are being exploited is that it can be hard to do without causing unwelcome side effects.

In other words, the loophole exists for a reason. If you "close" it you may cause good in one area but harm in others.

So at the very least one should move slowly to at least understand the issue properly, beyond just the obvious exploitation.

For example (and since I know nothing about small parcel imports, I'll use something I'm more familiar with) there's often a knee-jerk reaction to the exploitation of IP laws (trademark, copyright, patents). Some suggest killing it all. Some favor dumping patents but keeping the rest, and so on.

But any change will have "unexpected" consequences. These tools are used by businesses of all sizes and means. Killing copyright because you dont like Microsoft would equally kill things like Free Software (because it would invalidate the freedoms enforced by the GPL.)

So while "immediate action" seems like a good thing at first glance, it seldom works out that way. Throwing tarrifs on imported goods protects local jobs, but equally drives up prices (aka inflation).

So charitably I interpret "intentionally not neighbors changed" to "being changed intentionally, with care to achieve the desired effect not some unwelcome side effect.

roenxi• 2 years ago

Killing copyright because you dont like Microsoft would equally kill things like Free Software (because it would invalidate the freedoms enforced by the GPL.)

The point is a good one but the example was chosen a little quickly. It'd kill the GPL because the GPL is part of copyright law. That much is simple to see. But it'd probably be a net win for user freedom.

Right now, people choose to use free software either because it is good (and would see no difference if the GPL disappeared) or because it is free (and, again, would make decisions the same way in a no-IP world - only use software where the source is available). So the only risk is people copying an OSS project as free riders, withholding source changes and using some sort of embrace-extend-extinguish strategy.

But EEE relies on proprietary extensions, so that strategy probably doesn't work without the support of IP law. The OS projects could clone features back in. Proprietary providers could fight back with a client server model - but AWS for example already does that so it isn't really new and the equilibrium is generally to contribute upstream anyway.

I would expect software freedoms to improve if we lost the GPL as part of a big removal of IP laws. There'd be tactical instances where people were worse off, maybe. But strategically the OSS community would just be in a better position. They can keep doing what they do, it is harder to sue them and difficult to profit off their work in ways that aren't already possible.

commodoreboxer• 2 years ago

Killing copyright because you dont like Microsoft would equally kill things like Free Software (because it would invalidate the freedoms enforced by the GPL.)

Without copyright, the GPL wouldn't need to exist because the freedoms it protects would be impossible to suppress.

yunohn7• 2 years ago

The word “loophole” usually means a bypass of a law/rule in its spirit due to its language, thus leading to a void / gray area of enforcement that is beneficial to the exploiter.

I say that because everytime the topic of “closing a loophole” comes up, HNers act like it’s metaphysically impossible. But if you just think a little bit more, you’d realize that the existence of a loophole shows that the said law is specifically NOT covering the edge cases, but is covering the general cases without problems. Hence, fixing it would most likely affect the exploited case, not the beneficial case.

Arnt• 2 years ago

This "loophole" is likely to be motivated be the cost of processing small transactions.

If customs officers spend two minutes per parcel, then it makes sense to exempt parcels for which the expected revenue doesn't even cover one minute's labour cost.

Where I live, parcels with an expected revenue below the price of a cup of espresso are exempt. The definition is different, of course.

papichulo4• 2 years ago

This may have an inflationary effect. Perhaps they want to delay it as much as possible: Can we produce Milwaukee branded silicone spatulas 3-for-$6.99?

yunohn7• 2 years ago

There is no “may” be inflationary. The entirety of Western civilization is built on and its future is predicated on a perpetual cheaper labor class both at home and abroad. That’s the only way the people can even survive right now.

The moment things change, like minimum wage, oil prices, input costs - anything produced (even partially locally) jumps in cost. We have been seeing this happen constantly over the past decade.

Stealthisbook• 2 years ago

The de minimas threshold allows for lots of things that would otherwise be difficult to document or not worth the effort, from grandma mailing a sweater for Christmas to getting a replacement part shipped directly.

breerbgoat2• 2 years ago

US is sensing China's severe weakness and finally going for the detachment from China. That's why the recent passage of bans for TikTok, DJI, 100% tariffs on BYD, and now closing this loophole.

- Consumer giants from Starbucks to General Mills have one big sales problem: China. Starbucks reported China same-store sales dropped by 14% in the quarter ended June 30, far steeper than the 2% decline in the U.S. https://www.cnbc.com/2024/08/07/us-consumer-giants-have-one-...

- Foreign investors pulled a record $15 billion out of China last quarter https://fortune.com/asia/2024/08/12/foreign-investors-pull-r...

- China’s startup ecosystem has almost completely collapsed in the last 5 years. https://x.com/alecstapp/status/1834201320212898179?mx=2

- IBM Decides To Move R&D Out Of China https://www.forbes.com/sites/miltonezrati/2024/09/07/ibm-dec...

- Microsoft shuts down physical retail presence in mainland China https://www.retail-systems.com/rs/Microsoft_Shuts_Down_Physi...

- The world’s biggest luxury brands are hurting as Chinese shoppers rein in spending https://www.cnn.com/2024/07/26/business/lvmh-luxury-firms-ch...

- Japan’s Companies Sour on China After Years of Brushing Off Risk https://www.bloomberg.com/news/articles/2024-09-08/japan-inc...

Prbeek• 2 years ago

It's not China collapsing but local brands eclipsing western ones.

Scoundreller• 2 years ago

Officials said the vast number of parcels made it harder to block shipments of faulty products and illegal drugs like fentanyl.

I don’t believe for a second that their fentanyl interceptions will sufficiently improve otherwise.

The reality is that the margin is so strong, other methods (if small individual parcels were even a factor) would fill any gap. Even more interceptions would just lead to more shipments. That’s how good the margins are.

tazu• 2 years ago

I doubt more than 2% of the fentanyl in the US comes direct from China. China just ships to Mexico, which makes it to the US through the wide open southern border.

JumpCrisscross5• 2 years ago

doubt more than 2% of the fentanyl in the US comes direct from China. China just ships to Mexico

Correct. "The majority of precursor chemicals for illicitly manufactured fentanyl come from China and are synthesized into fentanyl in Mexico. Fentanyl is then smuggled across the border into the United States" [1].

That said, "China remains the primary source of fentanyl and fentanyl-related substances trafficked through international mail and express consignment operations environment, as well as the main source for all fentanyl-related substances trafficked into the United States" [2].

which makes it to the US through the wide open southern border

No. "Most of the illicit fentanyl coming across the U.S.-Mexico border is smuggled through official ports of entry" [3].

[1] https://home.treasury.gov/news/press-releases/jy1953

[2] https://www.dea.gov/sites/default/files/2020-03/DEA_GOV_DIR-...

[3] https://www.npr.org/2023/08/07/1192557904/part-1-investigati...

wslh• 2 years ago

I'm not saying this is necessarily accurate, but could it be inferred from the article that this loophole might act like a Denial of Service (DoS) attack on the mail inspection system? Similar to the overwhelming number of security log entries that no one reads?

g9yuayon• 2 years ago

Do US schools and media educate the public that taking drugs is dangerous, ruinous, self destructive, and shameful. I understand that the US in general favors personal freedom, but shouldn't there be some universal values, like don't take drugs?

Gud3• 2 years ago

There is nothing shameful about drug usage. It’s a part of being human.

What people who face an addiction needs is help, not being shamed.

ThinkBeat• 2 years ago

Drugs, child porn and terrorism can be used as universal arguments to "go to war", censorship, massive spending, etc etc. and people will not ask for evidence or at least any actual verifiable evidence.

I mean if you doubt the claims then you are advocating for spreading child pornography.

seydor• 2 years ago

I believe temu does not make use of such loophole in europe, and is still more successful than amazon

Ekaros• 2 years ago

Basically my understanding is that now the seller must do the tolls/taxes before sending the package. Really hits small time sellers in places like UK, but Ali and Temu and so on are so big they can just implement it, pay taxes and still be cheaper than adding local middlemen in the mix.

tyfon• 2 years ago

Here in Norway, the biggest issue is that China is still officially a developing country, so the Norwegian state subsidizes the freight cost. In practice it's cheaper too send a letter or parcel from China to Norway than doing the same within Norway.

kylehotchkiss• 2 years ago

Wasn't all this UPU stuff written before every country had their own flag airline? China has their own airlines with routes to many places that could be hauling their parcels without the subsidies

tdeck• 2 years ago

It's the same in the US. If I'm in no hurry I often buy small electronic parts from China simply because the whole thing is cheaper than the cheapest shipping buying from a retailer in the US.

SSLy• 2 years ago

Temu dumps incredible amount of money on marketing here.

paganel• 2 years ago

Because the great majority of stuff being put up for sale on Amazon comes from Shein and Temu, or some smaller Chinese lookalikes. In pure colonial style the Westerners just want a bigger cut without bringing anything new to the table.

nasmorn• 2 years ago

I don’t know. I ordered some drill bits and a kitchen gadget from Temu and it was hot garbage. The metal used was so soft you could bend the drills. Threw an out after one single use, same with the grater

Tarsul• 2 years ago

Temu and Shein do use loopholes in Europe/Germany, at least in Germany the reporting (and politicians lamenting) on such has increased recently so there will probably be some rule changes, most probably regarding the 150 euro minimum for customs duties.

https://www.spiegel.de/wirtschaft/unternehmen/temu-shein-spd...

sitharus2• 2 years ago

Here in New Zealand the government passed a law that sellers like AliExpress had to pay taxes on items they shipped here directly, based on the sale price. There was a lot of debate if they would, but they all did it.

They don't collect import duty though, because we've had a free trade agreement with China since 2008.

DanielLee5• 2 years ago

Interesting.

enb• 2 years ago

These shipments have increased from 140 million per year to more than 1 billion over 10 years

So a decrease? Or is this saying that after 10 years its 1billion/year?

sitharus2• 2 years ago

the latter, it's just a bit ambiguously worded. In the past 10 years shipments have increased from 140 million per year to over 1 billion per year.

IshKebab• 2 years ago

It's not ambiguous unless you count "open to HN pedantry".

meepmorp• 2 years ago

Over the past ten years, these shipments have increased from $140 million to over $1 billion annually.

mensetmanusman10• 2 years ago

Reminds me of when it was cheaper to ship bolts from China than from across the street due to subsidies.

US targets trade loophole used by ecommerce groups Temu and Shein

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