The Biden administration’s move to scrap a little-known trade rule aimed at tackling cheap imports from Chinese e-commerce giants, including Shein and Temu, is set to shape the future of US trade policies.
The US government has announced plans to scrap a little-known trade rule aimed at tackling cheap imports from firms like Shein and Temu. The move, which is part of the Biden administration’s efforts to protect American industries, has sparked concern among some lawmakers and industry experts.
Impact on E-commerce Giants
Shein and Temu are two e-commerce giants that have gained immense popularity in recent years due to their affordable prices and vast product offerings. However, these companies have also been criticized for selling counterfeit goods and exploiting loopholes in US trade policies.
Shein is a Chinese e-commerce platform specializing in fashion clothing and accessories.
Founded in 2008, the company has rapidly expanded globally, offering trendy and affordable products to customers worldwide.
With over 1 million new styles added annually, Shein's vast product range appeals to diverse tastes and budgets.
The brand's success can be attributed to its efficient supply chain management, strategic marketing, and mobile-first approach, allowing for seamless online shopping experiences.
The trade rule being scrapped is known as the ‘exclusion process,’ which allowed foreign companies to import certain products into the US without going through a rigorous review process. This meant that companies like Shein and Temu could easily bring in cheap imports, often using fake or misleading labeling to avoid detection.
Temu is a relatively new e-commerce platform that allows consumers to shop from various international sellers.
The platform connects buyers with suppliers from around the world, offering a wide range of products at competitive prices.
Founded in 2022, Temu has quickly gained popularity for its affordable and diverse product offerings.
Background of the Exclusion Process
The exclusion process was introduced in 2017 as part of the US-China Trade Deal. It was designed to facilitate trade between the US and China by allowing foreign companies to import certain products into the US without needing to meet strict safety and quality standards.
However, critics argued that the process was flawed and allowed companies like Shein and Temu to take advantage of loopholes in US trade policies. The exclusion process was also criticized for being opaque and lacking transparency, making it difficult for lawmakers and regulators to track imports and enforce compliance.
The Biden administration has announced plans to scrap the exclusion process and replace it with a new system that would require foreign companies to go through a more rigorous review process before importing products into the US. The new system would also provide greater transparency and oversight, making it easier for lawmakers and regulators to track imports and enforce compliance.
The move is seen as a significant shift in the US government’s approach to trade policy, with implications for e-commerce giants like Shein and Temu. As the situation develops, one thing is clear: ‘the future of trade policies in the US will be shaped by this new development.’
The United States has a complex trade policy framework that balances domestic economic interests with international obligations.
The Office of the United States Trade Representative (USTR) negotiates and enforces trade agreements, while the Department of Commerce regulates imports and exports.
Key policies include tariffs, quotas, and sanctions, which can impact global supply chains and economies.
According to the US Census Bureau, in 2020, the country's total trade value was over $5 trillion, with goods exports reaching $2.5 trillion.
