Shares of Chinese e-commerce giants fell in premarket trading on Thursday following a report from the South China Morning Post that the Biden administration plans to tighten regulations on low-value imports.
JD.com (NASDAQ:JD) dropped 0.5%, Alibaba (NYSE:BABA) fell 1.3%, and Pinduoduo (NASDAQ:PDD) took the biggest hit, declining more than 5%.
The report suggests that the U.S. is targeting Chinese platforms like Shein and Temu by stripping exemptions that currently allow low-value imports—those under $800—from duties and taxes.
The measures would significantly impact Chinese e-commerce platforms that rely on shipping low-cost goods to the U.S.
The Biden administration’s move is focused on addressing the so-called “de minimis” rule, which has been increasingly criticized for allowing Chinese imports to bypass tariffs and thorough inspections.
According to U.S. Deputy National Security Adviser Daleep Singh, the change would remove eligibility for duty exemptions on products already subject to trade enforcement actions, including those under Section 301 tariffs.
He is said to have told a press briefing on Thursday that since about 70% of Chinese textile and apparel imports are subject to these tariffs, the new measures would “drastically reduce the number of shipments entering through the de minimis exemption.”
The move is seen as part of a broader effort to curb what the U.S. sees as the misuse of this rule by Chinese companies. It has also weighed on Chinese e-commerce stocks as investors brace for potential disruptions to their U.S. export business.
In 2018, President Donald Trump imposed tariffs of 7% to 25% on $300 billion of Chinese imports, citing “unfair” trade practices. Current President Joe Biden retained most of the tariffs and expanded them to include Chinese solar panels, electric vehicles, and batteries.
