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A loophole used by Shein/Temu to ship packages to US tax-free (2024)
- LorenDB 2y agohttps://archive.ph/i8kC7 https://archive.ph/i8kC7
- 4ndrewl 2y agoSame in the UK.
- qwe----3 2y agoThey pay sales tax
- mschuster91 2y agoYeah, they use the same scam in Europe as well. There was a documentary following some customs officials a few months back, apparently they even use "smurfing" - they split large orders into multiple parcels with nominated "lower" values [1]... but of course sometimes the customs officials note "hey, I saw that recipient just a few packages ago". It's high time that we put the hammer down on Temu, Shein et al., and that hard. China and its companies routinely abuse relaxed rules meant for "developing" countries such as reduced, subsidised shipping or the mentioned tax simplifications - that status absolutely has to end rather sooner than later. And if they do not want to do that for whatever (corrupt?) reasons, at the very least mandate live feeds for all incoming parcels to customs. [1] https://www.youtube.com/watch?v=ySUKSRydpnY https://www.youtube.com/watch?v=ySUKSRydpnY
- A_D_E_P_T 2y ago> It's high time that we put the hammer down on Temu, Shein et al., and that hard. Why? Their business model is perfectly legal, and in fact, as the article makes clear, it's not even a "loophole" -- what they're taking advantage of is an explicit provision of law. On the other side of the equation, US consumers benefit from lower prices, and often superior quality, relative to what they'd otherwise get on Amazon and Wal-Mart. Besides, Amazon and Wal-Mart are often (in some retail categories even usually) middlemen for Chinese manufacturers. Shein, Temu, et al. are demonstrably superior middlemen. So what's the harm?
- mindslight 2y ago> So what's the harm? Bezos is looking at the tariff increases and wondering what the fuck he just bought. Welcome to the party, pal. There are no free returns on this one.
- datavirtue 2y agoNot to mention what happens when the people that have a clue pull back spending to stack cash while a multiprong trade war erupts. "A little pain?"
- oneshtein 2y agoIt looks like Russians bought it, like in other countries. For me, the whole situation reminds me Soviet «icebreaker» plan of war with NATO.
- lumost 2y agoWere making it cheaper to import product from across the globe than to manufacture and ship across town. Its in most countries interest to build things locally if they can. A policy which penalizes a local business in favor of a foreign one is pathological.
- oa335 2y ago> Its in most countries interest to build things locally if they can. Why is it in a country's interest to build things "locally"? Is that true in all cases?
- deleted 2y ago[deleted]
- Hamuko 2y agoA "loophole" that is very cut-and-dried piece of law. If you want companies to pay tax on products, don't set the minimum value threshold to $800. We used to have it at about 45€, then at 22€ and now at 0€. If I need to buy a 5€ adapter from Aliexpress, I pay VAT on it.
- loeg 2y agoCompanies don't pay these tariffs -- consumers do.
- whereismyacc 2y agoThey literally pay the tax but yes often the incidence ends up on the consumers.
- loeg 2y agoNo, these are paid by consumers at import time. It's not just a pass-through cost; consumers pay CBP. (I've imported many purchases, both below and above de minimis thresholds. Even the negotiation of which HTS schedule applies to specific items is between CBP and the individual -- the selling company isn't involved at all.)
- tyre 2y agoNot sure why you're downvoted. It's explicitly a part of American law. It wasn't an accident. It might not be in the US's best interest now (not saying one way or the other) but it's definitely by design! And not in a bad way either; this lowers costs for US consumers.
- _delirium 2y agoYes, this has historically been a nice aspect of living in the U.S. compared to Europe, for those of us who like obscure stuff. Want to order some book only available from an eBay seller in another country? If you're shipping to the U.S., it's easy. If you're shipping to Germany, it's going to get held up in a customs warehouse somewhere. Seems we're going to start getting more of the European experience now.
- loeg 2y agoIt isn't a loophole. It's by design. You can argue the limit should be lower, but it's not like 2016's $200 threshold would break Temu either.
- adrr 2y agoDe Minimus rules are the reason why you don’t have declare that fridge magnet and bag of chips you bought from your trip to Beijing. Going to make air travel a mess flying into the US setting de minimus to $0 and travelers have to declare everything.
- arijun 2y agoAre these laws so inflexible they can’t differentiate between a traveler and a shipping container?
- crooked-v 2y agoWhat if the traveler is a celebrity on a chartered jet bringing home a shipping container's worth of souvenirs? Where do you draw the line?
- ganoushoreilly 2y agoThere are personal exemption limits already at $800 per person returning from abroad.
- Dylan16807 2y agoAt that point it costs so much that the rule doesn't make a difference.
- votepaunchy 2y agoOr a traveler and a company doing $30 billion in de minimus import sales annually.
- maxerickson 2y ago
- walterbell 2y agoU.S. de minimis exception ends on Tuesday 4 February 2025 for all Chinese imports. New limit of 0$ for all goods. What will be the total tariff percentage on custom PCBs from China?
- 2OEH8eoCRo0 2y agoAbout damn time
- 15155 2y ago> U.S. de minimis exception ends on Tuesday 4 February 2025 for all Chinese imports. New limit of 0$ for all goods. The de minimis exemption ends on Tuesday, but only if the goods are already in a bonded warehouse or customs house pending clearance. Goods needed to be on their "final mode of transportation to the US" by 2025-02-01 at 12:00am Eastern Time to be exempt. The total Section 301 tariff on PCBs is now 35%.
- ck2 2y agoDe minimis also is $0 now for Canada and Mexico Car parts often travel back and forth across the borders before full assembly. Now they have tariffs each time they cross for each part. No-one is going to be able to afford a new car soon.
- bhaney 2y agoSo you're saying that in order to produce cars at a price point that will actually sell, manufacturers are going to be forced to start doing more of their production domestically? Oh no!
- maxerickson 2y agoOr they will just charge more. A US company that buys metal castings from Canada and sells finished parts back to a factory in Canada might decide to look for a new source, but it's not a given that they will find one, or that switching would make more sense than losing business to higher prices.
- Animats 2y agoThat ended yesterday. Trump's new tariffs apply all the way down to $0. Not clear what happens now that Customs and Border Protection has to look at all those little boxes. This isn't unexpected, though. There was a notice of proposed rule making back in September 2024, and it was probably going to happen this year, anyway.[1] This is going to complicate the "dropshipping" business. The dropshipper is usually the importer, and they now have to pay customs duties. But they're not the seller of record (the one Amazon says is the seller), who collects from the customer. Amazon likes to consider the customer to be the importer, but that may not fly. Amazon sellers are going to have to deal with the wonderful world of customs brokers, bonded warehouses, and e-filing customs paper work. Dropshippers who order in bulk and then ship out individual packages now either have to pay duties when they get the bulk shipment, or use a bonded warehouse (inspected by CBP) to store stuff on which duty has not yet been paid. DHL has a bonded warehouse service. [1] https://www.jdsupra.com/legalnews/cbp-proposes-to-modify-the-de-minimis-2068031/ https://www.jdsupra.com/legalnews/cbp-proposes-to-modify-the...
- Uvix 2y ago> Dropshippers who order in bulk and then ship out individual packages If they're doing that, they're no longer a dropshipper, just a bog-standard retailer.
- donavanm 2y ago> Not clear what happens now that Customs and Border Protection has to look at all those little boxes Push compliance on to the logistics providers, is my guess. Australia removed the low value VAT/GST exemption a few years ago. Anything parcel shaped coming in needs an appropriate customs form, declared values, and VAT remitted. If the overseas seller/sender hasnt already paid VAT then DHL/auspost/etc will hold it at the port until the recipient completes and remits GST. End user never deals with customs directly, its all handled by the importer before going to last mile delivery. Same experience sending/receiving in to the nordic countries. Though in that case nordpost entirely sucks, so any real-but-abnormal import is a HUGE pain dealing with them.
- fennecbutt 2y ago
- bentpins 2y agoI live in New Zealand - until 2019 things used to work this way for us too. A law was introduced to require overseas sellers selling more than $60,000 NZD/year into New Zealand to collect pay our Goods and Services Tax. Now Amazon/Temu/AliExpress others all collect 15% NZ GST at the checkout. It's pretty seamless as a buyer, just that GST is not usually shown until checkout unlike domestic sites. https://www.ird.govt.nz/gst/gst-for-overseas-businesses/gst-on-low-value-imported-goods/registering-for-gst-on-low-value-imported-goods https://www.ird.govt.nz/gst/gst-for-overseas-businesses/gst-...
- kiratp 2y ago> just that GST is not usually shown until checkout unlike domestic sites. This still puts domestic sites at a significant disadvantage.
- danpalmer 2y agoThis is distinct from import taxes. I used to work for a retailer that sold to the US. We collected sales tax (which is not GST/VAT, semantically different, and you have to pay a US company to calculate it for you), but still had to put a limit of $800 per package in order to not get hit by import duties. I believe Temu/Shein/etc collect US sales tax based on the destination address, but that is insufficient.
- toast0 2y ago> you have to pay a US company to calculate it for you You don't have to pay a company to calculate it for you, but it is difficult to calculate. I think all the states with sales tax assert that the correct sales tax for a delivered item is based on the location of delivery, and determining the tax jurisdictions from the location of delivery is complex. Using the city field of the address is often wrong, because that's really just the name of the post office that serves the delivery location, not an indiciation of what city (if any) the delivery location is in. Once you've determined the jurisdictions, you also need to confirm the rates for the shipped items and collect and remit the taxes. It's a lot harder than schemes where there's a single rate for a country or at most one rate per top level subdivision of a country, where delivery addresses almost always have the subdivision clearly marked.
- troad 2y agoI hate this cycle. 1) Media - you won't believe this legal loophole! 2) Politicians - what loophole? that's the law working as intended. 3) Media - watch our corrupt politicians defend the evil loophole that costs us millions! 4) Politicians - ok, we'll change it then. that'll get us positive coverage, right? 5) Law - gets worse
- CPLX 2y agoThe current system is wildly unfair and harmful to American manufacturers, and it's especially unfair to American brands that manufacture abroad but bring their goods to the U.S. in bulk.
- HDThoreaun 2y agoTariffs are wildly unfair to foreign manufacturers. Theres no reason we should be taxing everyone to help domestic manufacturers.
- fennecbutt 2y ago6) drooling voters - keep voting for the same old circle shape in square hole politicians
- deleted 2y ago[deleted]
- ChrisArchitect 2y ago(2024) Year old story. More recent development discussion: US targets trade loophole used by ecommerce groups Temu and Shein https://news.ycombinator.com/item?id=41536137 https://news.ycombinator.com/item?id=41536137
- dang 2y agoThanks! Macroexpanded: US targets trade loophole used by ecommerce groups Temu and Shein - https://news.ycombinator.com/item?id=41536137 https://news.ycombinator.com/item?id=41536137 - Sept 2024 (103 comments)
- zoklet-enjoyer 2y ago"loophole"
- dylan604 2y agoI’ve experienced part of this as someone that once sold imported music back in the late 90s. A competitor opened up in Hong Kong that sold at retail prices lower than our wholesale prices (we used legit importers who paid their duties and priced accordingly). I placed an order to see how it would turn out, and when I received the package, there was a note inside that stated the duties had not been paid on the order and that I was responsible for them. If customs were to inspect the package, they would hold it and release it once the duties were collected. These packages were too small and infrequent for customs to ever take notice, so the buyers were essentially getting items tax free because of course nobody self reported and paid these taxes. This was pretty much the straw breaking the camel’s back, and our little import business shut down shortly after that as orders dropped like a rock
- fennecbutt 2y agoThey don't include a note now they just under declare the value of contents of the package.
- nmstoker 2y agoPresuming they also combine this with foreign post abuse too? ie where one country's post office takes the mail at a knock down discount and then rely on the deal that post offices take on foreign sourced mail delivery for free, meaning the sender gets a massive discount vs sending if it were charged at anything remotely sustainable.
- markhahn 2y agolet's be clear: deminimus being $800 is corrupt. what gets me about this sort of thing is that we don't wind up getting to the bottom of it. the current deminimus violates the intent - we need to not just restore it to something reasonable, like $10, but also find out what in the process went wrong, find out whose palm was greased. $10 sounds too low? consider that with today's IT, import processing fees should be much lower than that. the idea of deminimus is a fine one, just that these numbers don't make sense, and cause a lot of damage.
- 1vuio0pswjnm7 2y ago"The limit for eligible items has been raised many times over the years, most recently going up to $800 from $200 in 2016." 4x increase. What is the explanation