Connect with us

News

US targets trade loophole used by ecommerce groups Temu and Shein

Published

on

US targets trade loophole used by ecommerce groups Temu and Shein

Unlock the US Election Countdown newsletter for free

The Biden administration is moving to close a trade loophole used by platforms like Temu, Shein and AliExpress to flood the US with cheap Chinese products.

The China-founded ecommerce groups have supercharged their growth by shipping cheap packages direct to American consumers by air and claiming what is known as the de minimis exemption to skip paying import tariffs on the shipments.

But the White House on Friday proposed new rules that would exclude a wide array of goods from being able to claim the exemptions, which extends to shipments of less than $800 in value. The proposed regulations will also make claiming duty free status more complex.

Advertisement

The US said the number of shipments entering the country via the de minimis rule had jumped from about 140mn a year a decade ago to more than 1bn a year today. Officials said the vast number of parcels made it harder to block shipments of faulty products and illegal drugs like fentanyl.

The Biden administration’s proposed rules, which will go through a public comment period before being finalised, threaten the business model that the Chinese groups have used to undercut and gain market share from online retailer Amazon.

Amazon sellers typically ship their goods in bulk to its warehouses, forcing them to pay import taxes, which became more expensive during the Trump administration when a large swath of Chinese imports were hit with higher tariffs. 

The new US rules aim to ensure products that ship direct-to-consumer cannot avoid the higher duties, which the White House said covered 40 per cent of imports from China, including 70 per cent of textiles.

The higher taxes on clothing will be a particular challenge for fast-fashion group Shein, which is vying to list shares in London. The Nanjing-founded company has yet to receive permission from Chinese officials to sell shares abroad.

Advertisement

US-listed depository receipts in Temu parent PDD Holdings were down about 2 per cent in Friday morning trading on Wall Street, while those in AliExpress parent Alibaba were down 1.3 per cent. The groups have begun to ship and warehouse more of their products locally in expectation that Washington would close the loophole.

Kim Glas, head of the National Council of Textile Organisations trade association, applauded the Biden administration’s announcement and said the existing rules “rewards Chinese ecommerce platforms and cheaters with a free trade agreement”.

“We also underscore the need for Congress and the administration to immediately eliminate this disastrous loophole once and for all in the coming weeks,” she said.

The US action follows similar concerns in the European Union, where Brussels is scrutinising the tax-free exemptions amid a similar onslaught of Chinese parcels. 

Temu said its “growth does not depend on the de minimis policy” and that it was reviewing the rule proposals, while Shein said “We look forward to working with all stakeholders on reform.” Alibaba did not immediately respond to a request for comment.

Advertisement

“American workers and businesses can outcompete anyone on a level playing field, but for too long, Chinese ecommerce platforms have skirted tariffs by abusing the de minimis exemption,” US commerce secretary Gina Raimondo said.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

News

Putin May Amp Up Sabotage In Response to UK Missiles in Russia, Officials Say

Published

on

Putin May Amp Up Sabotage In Response to UK Missiles in Russia, Officials Say

Kremlin threats to NATO countries over Ukraine potentially using western-made missiles to hit military targets in Russia would likely take the form of increased sabotage, cyber and other hybrid attacks, said US and European officials.

Russia could also retaliate by directly or indirectly targeting US troops in other areas like the Middle East, another person said.

Continue Reading

News

Russia expels 6 UK diplomats over spying allegations

Published

on

Russia expels 6 UK diplomats over spying allegations

Stay informed with free updates

Russia has expelled six UK diplomats over spying accusations, the country’s FSB security service said on Friday, ahead of talks between UK prime minister Sir Keir Starmer and US President Joe Biden on the war in Ukraine.

The FSB claimed it had documents showing that the UK Foreign Office department responsible for eastern Europe and central Asia was involved in the “co-ordination of escalation of international military-political situation” aimed at the “strategic defeat” of Russia.

The accreditation of the diplomats whose actions showed “signs of reconnaissance and subversive work” is to be revoked, the FSB said.

Advertisement

The expelled diplomats include British Embassy staff members Jessica Davenport, Grace Elvin, Andrew Daft Callum, Catherine MacDonald, Thomas John Hickson and Blake Pattel, the Russia-24 state-owned TV channel reported. The FSB has not yet confirmed their identities.

The UK Foreign Office did not immediately comment on the Russian move, whose timing will be seen in London as a diplomatic warning shot by President Vladimir Putin.

Starmer will meet Biden in Washington later on Friday to discuss western support for Ukraine in its war against Russia.

Top of the agenda will be whether to allow Ukraine to use western-made weapons for strikes deep inside Russia, after Putin warned that such a move could unleash a war with Nato. Britain has supported the use of such weapons but their use requires US approval.

Ukrainian President Volodymyr Zelenskyy has been lobbying western allies for permission to use the Army Tactical Missile System and Storm Shadow cruise missiles on targets inside Russia.

Advertisement

The UK has long taken a more permissive approach to how the weapons it supplies are deployed by Ukraine.

Less than a week after becoming UK prime minister in July, Starmer said the arsenal of weapons contributed by the UK must be “used in accordance with international humanitarian law” and for “defensive purposes”, but added: “It is for Ukraine to decide how to deploy it for those defensive purposes.” 

A month earlier Rishi Sunak, then UK prime minister, said: “How Ukraine uses the weapons that we provide is for them. Our job is to make sure we give them the capabilities that we can that they need.”

Britain was the first country to send long-range cruise missiles to Ukraine. 

Advertisement
Continue Reading

News

A loose electrical cable is found on ship that caused Baltimore bridge collapse

Published

on

A loose electrical cable is found on ship that caused Baltimore bridge collapse

In this aerial image released by the Maryland National Guard, the cargo ship Dali is stuck under part of the structure of the Francis Scott Key Bridge after the ship hit the bridge, March 26, 2024, in Baltimore.

AP/Maryland National Guard


hide caption

toggle caption

Advertisement

AP/Maryland National Guard

BALTIMORE — Investigators working to pinpoint the cause of Baltimore’s Francis Scott Key Bridge collapse discovered a loose cable that could have caused electrical issues on the Dali, the massive cargo ship that lost power and disastrously veered off course before striking the bridge.

When disconnected, the problematic cable triggered an electrical blackout on the ship similar to what happened as it approached the bridge on March 26, according to new documents released Wednesday by the National Transportation Safety Board.

The documents don’t include any analysis or conclusions, which will be released later in the board’s final report. A spokesperson for the board declined to comment as the investigation is ongoing.

Advertisement

The Dali was leaving Baltimore bound for Sri Lanka when its steering failed because of the power loss. It crashed into one of the bridge’s supporting columns, destroying the 1.6-mile span and killing six members of a roadwork crew.

Safety investigators released a preliminary report earlier this year that documented a series of power issues on the ship before and after its departure from Baltimore. But the new records offer more details about how its electrical system may have failed in the critical moments leading up to the deadly disaster.

The Dali first experienced a power outage when it was still docked in Baltimore. That was after a crew member mistakenly closed an exhaust damper while conducting maintenance, causing one of the ship’s diesel engines to stall, according to the earlier report. Crew members then made changes to the ship’s electrical configuration, switching from one transformer and breaker system — which had been in use for several months — to a second that was active upon its departure.

That second transformer and breaker system is where investigators found the loose cable, according to investigative reports.

Investigators also removed an electrical component from the same system for additional testing, according to a supplemental report released in June. They removed what is called a terminal block, which is used to connect electrical wires.

Advertisement

Engineers from Hyundai, the manufacturer of the ship’s electrical system, said the loose cable could create an open circuit and cause a breaker to open, according to a 41-page report detailing tests completed on the Dali in the weeks after the collapse. The engineers disconnected the cable as part of a simulation, which resulted in a blackout on the ship.

Hyundai sent engineers from its headquarters in South Korea to help with the investigation in April.

The new documents also included various certificates issued after inspections of the Dali pertaining to its general condition and compliance with maritime safety regulations.

“It’s pretty clear that they think they’ve found an issue that could cause a blackout,” said Tom Roth-Roffy, a former National Transportation Safety Board investigator who focused on maritime investigations. He said the loose cable was in a critical place within the electrical system.

Advertisement

He also noted that investigators have clearly taken a thorough approach and documented their findings well. The new documents suggest they found very few other problems as they combed through the various systems and machinery aboard the Dali.

In terms of whether the loose connection suggests inadequate maintenance of the ship or other problems with the crew, Roth-Roffy said it seems like a toss-up. Checking hundreds or thousands of wires is a tedious and time-consuming process, he said, and there are any number of factors that could cause connections to loosen over time, including the constant vibrations on a ship.

“To say that this should have been detected is probably true but somewhat unrealistic,” he said. “But the ship’s crew has ultimate responsibility for the proper maintenance and operation of the ship.”

The Dali left Baltimore for Virginia in late June. It was scheduled to undergo repairs there, and local media reported last week that it will sail to China, likely sometime later this month.

Advertisement
Continue Reading
Advertisement

Trending