Fashion giants like Shein and Temu have seen significant growth in the US due to tariff exemptions that kept prices low for packages shipped from China.
President Trump has ordered the closure of these loopholes starting with packages from China-Hong Kong, potentially impacting airline emissions related to the fashion industry.
Last year, 1.36 billion packages entered the US through this loophole, mostly from China. This exemption allows items under $800 to enter without customs duty, leading to a rise in emissions from shipping packages by air.
Flying packages across the ocean is 68x more carbon-intensive than marine cargo transport, according to Climate Action Accelerator.
$23 billion business
In many countries, freight below a certain value is exempt from taxes. The US set the minimum exemption at $800, allowing foreign e-commerce platforms to compete with domestic retailers like Amazon.
This exemption helped Shein establish a niche in the US market with affordable apparel. However, President Biden announced a crackdown on these imports citing various concerns.
The number of shipments to the US has increased significantly, leading to environmental concerns and the need for stricter regulations.
President Trump took steps to end the De Minimis exemption, aiming to impose taxes on packages from Hong Kong and mainland China.
New rules will phase out exemptions over the next few weeks, with steep taxation coming into effect on June 1st. This move is expected to impact air ticket emissions significantly.
1 Billion Packages and Greenhouse Gas
The increase in air freight usage has led to a rise in greenhouse gas emissions. Efforts to reduce emissions in this sector are minimal, posing a challenge for sustainability initiatives.
Shein and Temu did not respond to requests for comment regarding the new regulations.
What’s next?
Trump’s actions to close the loophole in February resulted in declining sales for Shein and Temu, indicating potential shifts in e-commerce practices.
Companies might opt for larger cargo shipments using marine transport to avoid high tariffs and reduce emissions, a change that could impact the industry significantly.
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Source: www.nytimes.com
