Discussion questions:
- What makes the de minimis rule controversial?
- Who might be the winners and losers of the suspension of the de minimis provision for U.S. imports from China? Why?
- Imagine you are part of the sourcing department of a U.S.-based fashion company that currently sources from China. How would you respond to the situation in the video, and what recommendations would you make regarding your company’s sourcing strategies?
- Do you have any other thoughts or reflections on the video?
Additional reading:
- Shein, Temu, Amazon Haul set for price hikes as US shuts trade loophole (Reuters)
- China’s E-Commerce Exports and U.S. De Minimis Policies (Congressional Research Service)
- Event Recording: Regulating and Reforming De Minimis (October 2024)
FASH455 Global Apparel & Textile Trade and Sourcing 
#1 and #2
The de minimis rule allows imports under $800 to enter the U.S. without tariffs, which has made it easier for foreign companies, especially from China, to sell directly to American consumers. It’s controversial because it gives companies like Shein and Temu an advantage over U.S. businesses that must pay taxes and follow stricter regulations. Many American manufacturers and retailers argue that this loophole undercuts their prices and makes it harder for them to compete. It has also raised concerns about counterfeit goods and unsafe products slipping through customs with little oversight. Now that the U.S. is suspending the rule for Chinese imports, some companies will benefit while others will struggle. American manufacturers and retailers could gain an edge since they won’t have to compete with such a high volume of tax-free imports. This change might encourage more production within the U.S. or at least create a fairer playing field for domestic businesses. On the other hand, Chinese e-commerce companies that rely on this loophole will likely take a hit as their costs rise. U.S. consumers may also feel the impact if prices go up and shipping times get longer. Many shoppers have gotten used to cheap products from Chinese retailers, so this shift could be frustrating. It’s a big change that will likely reshape how affordable fashion and other goods are sold in the U.S.
Discussion questions 1 and 2:
The de minimis trade rule is controversial as it allowed any packages shipped into the U.S. that totaled less than $800 to do so duty free. This then allowed larger Chinese companies such as Shein or Temu to easily sell product directly to the American consumer and avoid the tariffs that other foreign brands and suppliers were hit with. It could then be argued that this rule inadvertently gives these foreign brands an advantage over American competitors who cannot afford to sustain such low priced goods, and already pay high tax rates, and are held to significantly higher production standards. One winner for the suspension of the de minimis trade rule on imports to the United States from China would be U.S. competitive manufacturers. Without the rule in place, brands such as Shein or Temu will in theory have to pay the ever rising tariffs put on Chinese imports to the U.S. (though critics argue they will just find new ways around these costs). Arguably one loser for the suspension of the de minimis rule is U.S. consumers, especially those who favored these brands for their affordable prices. This rule protected U.S. consumers placing individual orders from these foreign brands from having to pay the same tariff costs as U.S. fashion companies and retailers who tend to place much larger and expensive orders. Without the rule, we may see brands like Shein or Temu raise their prices in order to pass the cost increase onto their consumers. This will impact U.S. consumers who will now either have to pay higher prices for the same goods from these brands, or purchase from U.S. companies who may charge equally if not higher prices.