OPINION: The de minimis customs rule allows Chinese producers to ship directly to consumers, thus avoiding U.S. tariffs, taxes and oversight, and giving them an unfair advantage over U.S. producers and retailers.
Last year, Amazon AMZN earned a staggering $21 billion. And much of that profit came directly from Amazon’s position as China’s online marketing machine. China now accounts for roughly 40% of all Amazon sales, and an estimated 75% of all new sellers on Amazon are Chinese companies.
No tariff on insignificant shipments At issue is something known as the “de minimis” threshold for products shipped into the United States. The de minimis provision was written into U.S. customs law almost 100 years ago, and was intended to save the federal government the trouble of assessing tariffs on small, inconsequential items mailed from overseas.
With e-commerce sales exploding, Amazon and other online retailers have been able to exponentially boost their sales and profits. Amazon’s sales revenue last year totaled over $386 billion. And according to Harsh Khurana, the CEO of WeCultivate, roughly 52% of sellers across Amazon are based in China, meaning Amazon is funneling extraordinary amounts of money to Chinese companies.
It’s a pretty stunning arrangement—and it ends any hope that U.S. bricks and mortar retailers can hope to compete fairly with Amazon. It also means that untold millions of potentially dangerous or counterfeit products continue to arrive in the U.S. each day. Particularly disturbing is the fact that over 90% of all intellectual property seizures come through international mail and express shipping. And 83% of those seizures originate in China.
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