The US plans to close a tax loophole on low-value imports, potentially affecting retailers like Shein.
- Shein’s executive chairman, Donald Tang, insists the move will not impact the company’s competitive edge.
- The US aims to amend the ‘de minimis’ rule, affecting goods under $800 entering duty-free.
- Tang argues Shein’s advantage lies in its on-demand model, not tax exemptions.
- Political scrutiny grows in the UK as Shein anticipates a £50bn market debut in London.
The United States has announced intentions to amend regulations concerning a trade exemption that permits low-value shipments, valued under $800, to enter the country without incurring duty. This measure, targeting platforms such as Shein, seeks to address the overwhelming influx of packages entering the US without proper taxation.
Shein’s executive chairman, Donald Tang, has confidently stated that the proposed changes will not significantly affect the company’s market position. According to Tang, the competitive advantage held by Shein is attributed more to its unique on-demand business model rather than reliance on the current ‘de minimis’ rule.
Tang further elaborated that the company’s strength lies in the efficiency and the extensive variety of choices it provides to consumers. These factors, he argues, offer a considerable market edge beyond what minor tax exemptions could potentially offer.
Moreover, Tang has advocated for any adjustments in tax regulations to consider levies on the wholesale price of goods as they enter the United States rather than the retail price, which might present a fairer approach.
In the United Kingdom, the announcement has reignited political debates as Shein prepares for a significant £50 billion listing on the London Stock Exchange. Labour’s business select committee chair, Liam Byrne, has urged the UK government to ensure that Shein adheres to stringent standards, particularly concerning allegations of forced labour in the Xinjiang region of China.
Shein remains confident in its strategic advantages despite impending US tax law changes.
