Customs Battle: US and EU Target Chinese Trading Platforms

The de minimis rule, which allows packages below a certain value to be exempt from customs duties, is under review in both the US and the EU. Currently, this threshold is set at $800 in the US and €150 in the EU. The surge in small packages entering the US, from 140 million a year a decade ago to 1 billion in 2023, has raised concerns about the difficulty in detecting illegal items. This increase is largely attributed to Chinese trading platforms, which have been aggressively expanding their international reach. US President Joe Biden announced the review on September 13, coinciding with the EU's similar initiative. The growing number of packages has made it challenging for customs officials to monitor and inspect shipments effectively. The situation reflects a broader trend of deteriorating trade relations with China, as both regions seek to address the implications of this influx. Chinese companies, facing a decline in domestic consumer spending, have intensified their international marketing efforts. PDD Group, the parent company of Temu, reported a remarkable 90% increase in sales, highlighting the competitive landscape that these companies are navigating. Founder Colin Huang acknowledged that future growth may be hindered by external challenges, indicating a shift in focus for Chinese businesses. As both the US and EU consider new customs measures, the outcome could significantly impact trade dynamics and the operations of Chinese trading platforms. The revisions aim to balance the facilitation of trade with the need for security and regulatory compliance, marking a pivotal moment in international commerce.