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In the light of an inordinate amount of Chinese goods entering the borders duty-free, two US Senators have called for restricting the flow of Chinese imports. Addressing President Joe Biden, the Senators called for an action akin to the one taken by India.
In a letter, the senators stated that US manufacturers are unable to compete with low-cost competitors due to alleged forced labor and state subsidies in crucial sectors.
Measures taken by the Indian Govt.
The Indian Government executed a rather stringent ban on the purchase of Chinese Govt. via Chinese E-Commerce sites. The catalyst for this action came through with the various stakeholders expressing their concerns. India’s small and medium businesses were on the precipice of perishing as a result of the inundation of the market with low priced Chinese imports.
Numerous Chinese e-commerce platforms were dispatching goods ordered by Indian consumers to various cities, exploiting the “gift” classification loophole. According to domestic laws, gifts received by Indians valued up to Rs 5,000 were exempt from taxes.
The crackdown was prompted by reports indicating that Chinese retailers like Club Factory, AliExpress, and Shein were exploiting the exemption from customs duties on gifts under Rs 5,000. An official communication from the customs department highlighted concerns about authorized registered courier outsourcing activities without prior permission or notification to customs authorities and without conducting necessary due diligence and checks.
Ban on Chinese Apps
Over the past few years, the Indian government has issued orders to ban approximately 250 Chinese apps, citing them as “prejudicial to the sovereignty and integrity of India, defense of India, security of the state, and public order.”
Among these apps were popular ones like TikTok, Xender, Shein, and Camscanner, which had amassed millions of downloads in India. The ban also extended to well-known mobile games such as PUBG Mobile and Garena Free Fire, which not only surprised players but also sent shockwaves through the country’s esports community.
As reported by the news agency AP, US trade law permits packages destined for American consumers and valued below a specific threshold to enter tariff-free. This threshold, known as “de minimis,” is currently set at $800 per person per day, with the majority of these imports comprising retail products purchased online, similar to India’s Rs 5,000 limit.
The report highlights concerns about the significant increase in such shipments from China, leading lawmakers in both chambers to propose legislation aimed at changing how the US handles imports valued at less than $800. Sens. Sherrod Brown, D-Ohio, and Rick Scott, R-Fla., have urged President Biden in a letter to completely eliminate duty-free treatment for these products.
In their letter, the senators referred to Temu, Shein, and AliExpress as companies that “unfairly” benefit from the duty-free treatment of their goods. They expressed concern that the surge in shipments negatively affects big box stores and other retailers in the U.S.
The senators stated that this escalating issue impacts the safety and livelihoods of Americans, outsourcing not only the manufacturing but also the retail sectors to China. They emphasized that China systematically utilizes slave labor among other unconscionable practices to undermine the American economy.
Conclusion
In conclusion, the call by US Senators for a four-year ‘India-style’ ban on Chinese imports underscores growing concerns over the influx of duty-free Chinese goods and their impact on domestic industries. Mirroring India’s proactive measures, this proposal aims to address unfair competition fueled by alleged forced labor and state subsidies. The swift actions taken by both India and the US reflect a shared determination to safeguard local economies and protect against practices deemed detrimental to sovereignty and economic integrity. As geopolitical dynamics evolve, such measures signal a shift towards greater scrutiny and regulation in international trade relations.
