6 ms·

Both Shein and TEMU are taking advantage of two changes to customs rules that have been made in the last 5 years. First, the de minimis threshold was increased

by mattas 3y ago

Both Shein and TEMU are taking advantage of two changes to customs rules that have been made in the last 5 years. First, the de minimis threshold was increased to $800. Second, CBP has introduced a new entry (Type 86) that makes it a lot easier to clear de minimis shipments. This enables foreign retailers to easily import single shipments to US customers. Because they no longer need to deal with more complicated customs filings, they can instead use air freight and get shipments to customers quickly. They trade customs expense for premium air freight.

pridkett 3y ago
They’re air freighting the goods but doing so in bulk, so it ends up being far less than what the customs fees would be. If they were shipping them in bulk to a US warehouse without a designated customer, they’d have to pay customs. But rather, they arrive at a repackager which manages to skirt these regulations - at the expense of the taxpayer and competition who follow the rules. In other words, they’ve found a loophole to avoid customs on goods with otherwise high tariffs, pocketing some of the money for themselves and using the rest of the savings (and arguably difficult to return lower quality merchandise, we are talking about fast fashion) to undercut competition. I’d think that SV would worship this type of “disruption”.
- mattas 3y ago
  Right. They even print the UPS/FedEx/USPS label in the distribution center in China. They throw the individual boxes in a Gaylord and inject the Gaylords into the domestic distribution network at the destination air terminal.
  - gruez 3y ago
    >Gaylord I was going to flag this but did a double take: https://en.wiktionary.org/wiki/gaylord#Noun_2 https://en.wiktionary.org/wiki/gaylord#Noun_2
    - nerdponx 3y ago
      It's also a name.
      - sudosysgen 3y ago
        As well as a city in Michigan and Minnesota, which doesn't seem to have a connection to the corporation.
      - stn8188 3y ago
        As well as a ventilation equipment manufacturer in Oregon [0]. You can imagine how it was driving by every day on the middle school bus. (About as well as Bonar Plastics, which the bus also passed every day). [0] https://www.gaylordventilation.com/ https://www.gaylordventilation.com/
        asimovfan 3y ago
        Its also a playground equipment company! Thought it was very funny when i was eight.
      - Doctor_Fegg 3y ago
        And a Chicago street gang: https://en.m.wikipedia.org/wiki/Chicago_Gaylords https://en.m.wikipedia.org/wiki/Chicago_Gaylords
    - wannacboatmovie 3y ago
      > I was going to flag this Please consider easing up on the itchy trigger finger. Even without knowing the meaning, there is no way any word used in the context above could ever be construed as offensive.
    - Kerb_ 3y ago
      So you're why we're renaming the equipment at my job! ;)
- gruez 3y ago
  >at the expense of the taxpayer and competition Would taxpayer dollars be better spent collecting $5 worth of duties from a shipment? Or would the customer (who are taxpayers) be better served by having to pay CBP fees for their $20 shipment from china? Would both the customer and the manufacturer (ie. "competition") be better served if the goods had to go through an intermediary in the US to reach the customer?
  - polygamous_bat 3y ago
    > Or would the customer (who are taxpayers) be better served by having to pay CBP fees for their $20 shipment from china? Sorry, this libertarian logic falls short because there are taxpayers who are not customers of bottom-of-the-barrel Chinese doodads, and thus are being hurt by this laxness. Why should I subsidize someone else’s “seen on social media” gadget addiction?
    - bobsmooth 3y ago
      Why should I have to pay more so overpriced brands don't have to compete as hard?
      - stefan_ 3y ago
        It’s not about paying more, it’s about paying the same. The local brand can not avoid the duties on products less than $X, just like you are charged sales tax at the supermarket on a $5 purchase. Thankfully computers exist now so it is really not onerous at all to charge the correct duties and massive fees if you want to make the customs people do work (this is basically now the EU approach, and AliExpress had no problem adjusting).
        charcircuit 3y ago
        Some products are too niche to be sold locally. If no local brands exist for a product I have to buy it from someone oversees and import it myself. Even if it is sold locally it may be overly marked up compared to buying it from the original seller because there is no local competition to keep the price in check.
- sudosysgen 3y ago
  I doubt that CBP spending 30+ minutes of bureaucracy and agent time to inspect, calculate the true value of, invoice and bill 100$ worth of items for 10$ worth of tariffs would be a net profit.
  - mattas 3y ago
    Anecdotally (there's probably the actual figure out there somewhere), less than 1% of all imported goods are flagged for a customs inspection. Duty is calculated and paid electronically by a licensed customs broker prior to the goods entering the country. Type 86 filings are still necessary for di minimis shipments, so there isn't a material bureaucracy savings.
    - sudosysgen 3y ago
      Yes, I agree. However, anecdotally again, I've never bought anything past the de minimis threshold from China that was actually labelled properly at the correct price - the likelihood of it getting flagged is low enough that it's worth just eating the loss in that case. Given that, since it doesn't even make economic to inspect the packages even if you already knew they were mislabelled or misvalued, it's not clear to me that the taxpayer loses by increasing the de minimis threshold at least to a number where it would make sense. I'm thinking of the bureaucracy that the government incurs when they do decide to inspect and fine/confiscate, not the bureaucracy in the happy path, which as you've seen is very streamlined.
      - creer 3y ago
        Which is fine reasoning but rarely enters into the law or regulation. A lot of inspection power has to do with other "concerns" such as mislabelling (per se), trademark protection, counterfeits, forbidden items (for example radio bands), etc etc. "Economic sense" is long lost by then.
- hrdwdmrbl 3y ago
  Amazon does need the competition though
dylan604 3y ago
A small shop I was part of sold imported items. We bought our inventory from wholesalers that paid the import fees, added their markup, where we would then add our retail markup for sale to customers. The final death knell in our little company was from a company based in Hong Kong with retail prices cheaper than the wholesale prices we had access to. By selling direct to customers, they were bypassing the customs duties/tariffs. They would place a note in the package stating that duties were owed. Never heard of anyone's package getting stopped and held for the buyer to pay the fees for it to be released. Yeah, I'm only a "little" bitter.
- cinntaile 3y ago
  I don't get why the government is so keen on destroying its local businesses. They should simply provide the same level playing field for everyone.
  - AniseAbyss 3y ago
    [dead]
  - dylan604 3y ago
    How is this the fault of gov’t? The rules are the same for everyone. In this case, not everyone was playing by the same rules. If you don’t understand the logic behind tariffs, that’s something you can look up on your own. To me, this is no different from the guy selling electronics out of a van in the parking lot of the electronics store. It’s not legal, but it’s not a large enough problem for anyone to do anything about. Maybe the items are stolen, maybe they’re counterfeit, or maybe they are real and just acquired by skirting the system. Either way, the person with the van is deliberately not playing by the rules everyone else does. In my situation, the van was a website and the parking lot just happened to be out of jurisdiction of any agency that could do anything about it. You can now say the same things about Ali* or other type websites.
    - cinntaile 3y ago
      If your government doesn't enforce that the tax/duty/whatever was paid, then someone will obviously take advantage of this. I pay taxes when I buy from Aliexpress etc. When I buy directly from outside of my tax region, the company or person that I bought from has to prove that the tax was paid when the goods enter my country or they are stopped at the border until I pay the taxes + processing fee. Your government did not protect your interests here in ensuring that the playing field is level.
mavelikara 3y ago
Seems after this loophole was fixed, new ones have popped up: https://thehill.com/opinion/finance/418081-usps-is-done-subsidizing-chinese-package-shipping/amp/ https://thehill.com/opinion/finance/418081-usps-is-done-subs...
Sparkyte 3y ago
I think we should those restrictions back. The products just being mass sold by wish.com, TEMU and Shein are dangerous. Amazon and Walmart deserve just as much flack for also selling dangerous goods. Radioactive wellness bracelets to sketch powersupplies. Not only that but the carbon footprint on shit shipped is massive!!!
- aembleton 3y ago
  It's all made in China anyway so I can't imagine the carbon footprint is much more when it's shipped direct to consumers instead of going via a middlemen.
  - Sparkyte 3y ago
    Actually it is huge because the products are typically shipped are under regulation and controls. When you make a higher quality product it doesn't always mean it will last longer, but in comparison to the other product it does. Now we are justifying the baseline by unregulated and uncontrolled goods as a standard for quality so people use weak USB cables from an unknown or non-FCC compliant manufacturer in China and their home burns. It isn't the consumers fault because the product was sold falsely and the general consumer can't keep everything straight.

by mattas 3y ago

pridkett 3y ago

They’re air freighting the goods but doing so in bulk, so it ends up being far less than what the customs fees would be. If they were shipping them in bulk to a US warehouse without a designated customer, they’d have to pay customs. But rather, they arrive at a repackager which manages to skirt these regulations - at the expense of the taxpayer and competition who follow the rules. In other words, they’ve found a loophole to avoid customs on goods with otherwise high tariffs, pocketing some of the money for themselves and using the rest of the savings (and arguably difficult to return lower quality merchandise, we are talking about fast fashion) to undercut competition. I’d think that SV would worship this type of “disruption”.

mattas 3y ago
Right. They even print the UPS/FedEx/USPS label in the distribution center in China. They throw the individual boxes in a Gaylord and inject the Gaylords into the domestic distribution network at the destination air terminal.
- gruez 3y ago
  >Gaylord I was going to flag this but did a double take: https://en.wiktionary.org/wiki/gaylord#Noun_2 https://en.wiktionary.org/wiki/gaylord#Noun_2
  - nerdponx 3y ago
    It's also a name.
    - sudosysgen 3y ago
      As well as a city in Michigan and Minnesota, which doesn't seem to have a connection to the corporation.
    - stn8188 3y ago
      As well as a ventilation equipment manufacturer in Oregon [0]. You can imagine how it was driving by every day on the middle school bus. (About as well as Bonar Plastics, which the bus also passed every day). [0] https://www.gaylordventilation.com/ https://www.gaylordventilation.com/
      - asimovfan 3y ago
        Its also a playground equipment company! Thought it was very funny when i was eight.
    - Doctor_Fegg 3y ago
      And a Chicago street gang: https://en.m.wikipedia.org/wiki/Chicago_Gaylords https://en.m.wikipedia.org/wiki/Chicago_Gaylords
  - wannacboatmovie 3y ago
    > I was going to flag this Please consider easing up on the itchy trigger finger. Even without knowing the meaning, there is no way any word used in the context above could ever be construed as offensive.
  - Kerb_ 3y ago
    So you're why we're renaming the equipment at my job! ;)
gruez 3y ago
>at the expense of the taxpayer and competition Would taxpayer dollars be better spent collecting $5 worth of duties from a shipment? Or would the customer (who are taxpayers) be better served by having to pay CBP fees for their $20 shipment from china? Would both the customer and the manufacturer (ie. "competition") be better served if the goods had to go through an intermediary in the US to reach the customer?
- polygamous_bat 3y ago
  > Or would the customer (who are taxpayers) be better served by having to pay CBP fees for their $20 shipment from china? Sorry, this libertarian logic falls short because there are taxpayers who are not customers of bottom-of-the-barrel Chinese doodads, and thus are being hurt by this laxness. Why should I subsidize someone else’s “seen on social media” gadget addiction?
  - bobsmooth 3y ago
    Why should I have to pay more so overpriced brands don't have to compete as hard?
    - stefan_ 3y ago
      It’s not about paying more, it’s about paying the same. The local brand can not avoid the duties on products less than $X, just like you are charged sales tax at the supermarket on a $5 purchase. Thankfully computers exist now so it is really not onerous at all to charge the correct duties and massive fees if you want to make the customs people do work (this is basically now the EU approach, and AliExpress had no problem adjusting).
      - charcircuit 3y ago
        Some products are too niche to be sold locally. If no local brands exist for a product I have to buy it from someone oversees and import it myself. Even if it is sold locally it may be overly marked up compared to buying it from the original seller because there is no local competition to keep the price in check.
sudosysgen 3y ago
I doubt that CBP spending 30+ minutes of bureaucracy and agent time to inspect, calculate the true value of, invoice and bill 100$ worth of items for 10$ worth of tariffs would be a net profit.
- mattas 3y ago
  Anecdotally (there's probably the actual figure out there somewhere), less than 1% of all imported goods are flagged for a customs inspection. Duty is calculated and paid electronically by a licensed customs broker prior to the goods entering the country. Type 86 filings are still necessary for di minimis shipments, so there isn't a material bureaucracy savings.
  - sudosysgen 3y ago
    Yes, I agree. However, anecdotally again, I've never bought anything past the de minimis threshold from China that was actually labelled properly at the correct price - the likelihood of it getting flagged is low enough that it's worth just eating the loss in that case. Given that, since it doesn't even make economic to inspect the packages even if you already knew they were mislabelled or misvalued, it's not clear to me that the taxpayer loses by increasing the de minimis threshold at least to a number where it would make sense. I'm thinking of the bureaucracy that the government incurs when they do decide to inspect and fine/confiscate, not the bureaucracy in the happy path, which as you've seen is very streamlined.
    - creer 3y ago
      Which is fine reasoning but rarely enters into the law or regulation. A lot of inspection power has to do with other "concerns" such as mislabelling (per se), trademark protection, counterfeits, forbidden items (for example radio bands), etc etc. "Economic sense" is long lost by then.
hrdwdmrbl 3y ago
Amazon does need the competition though

dylan604 3y ago

A small shop I was part of sold imported items. We bought our inventory from wholesalers that paid the import fees, added their markup, where we would then add our retail markup for sale to customers. The final death knell in our little company was from a company based in Hong Kong with retail prices cheaper than the wholesale prices we had access to. By selling direct to customers, they were bypassing the customs duties/tariffs. They would place a note in the package stating that duties were owed. Never heard of anyone's package getting stopped and held for the buyer to pay the fees for it to be released. Yeah, I'm only a "little" bitter.

cinntaile 3y ago
I don't get why the government is so keen on destroying its local businesses. They should simply provide the same level playing field for everyone.
- AniseAbyss 3y ago
  [dead]
- dylan604 3y ago
  How is this the fault of gov’t? The rules are the same for everyone. In this case, not everyone was playing by the same rules. If you don’t understand the logic behind tariffs, that’s something you can look up on your own. To me, this is no different from the guy selling electronics out of a van in the parking lot of the electronics store. It’s not legal, but it’s not a large enough problem for anyone to do anything about. Maybe the items are stolen, maybe they’re counterfeit, or maybe they are real and just acquired by skirting the system. Either way, the person with the van is deliberately not playing by the rules everyone else does. In my situation, the van was a website and the parking lot just happened to be out of jurisdiction of any agency that could do anything about it. You can now say the same things about Ali* or other type websites.
  - cinntaile 3y ago
    If your government doesn't enforce that the tax/duty/whatever was paid, then someone will obviously take advantage of this. I pay taxes when I buy from Aliexpress etc. When I buy directly from outside of my tax region, the company or person that I bought from has to prove that the tax was paid when the goods enter my country or they are stopped at the border until I pay the taxes + processing fee. Your government did not protect your interests here in ensuring that the playing field is level.

mavelikara 3y ago

Seems after this loophole was fixed, new ones have popped up: https://thehill.com/opinion/finance/418081-usps-is-done-subsidizing-chinese-package-shipping/amp/ https://thehill.com/opinion/finance/418081-usps-is-done-subs...

Sparkyte 3y ago

I think we should those restrictions back. The products just being mass sold by wish.com, TEMU and Shein are dangerous. Amazon and Walmart deserve just as much flack for also selling dangerous goods. Radioactive wellness bracelets to sketch powersupplies. Not only that but the carbon footprint on shit shipped is massive!!!

aembleton 3y ago
It's all made in China anyway so I can't imagine the carbon footprint is much more when it's shipped direct to consumers instead of going via a middlemen.
- Sparkyte 3y ago
  Actually it is huge because the products are typically shipped are under regulation and controls. When you make a higher quality product it doesn't always mean it will last longer, but in comparison to the other product it does. Now we are justifying the baseline by unregulated and uncontrolled goods as a standard for quality so people use weak USB cables from an unknown or non-FCC compliant manufacturer in China and their home burns. It isn't the consumers fault because the product was sold falsely and the general consumer can't keep everything straight.