Here's a topic that has been on the rise for a few months now and could soon lead to a new trade war: the battle of the de minimis. We're not talking about cousins of the cartoon Minions, but about the rule that packages below a certain value are exempt from customs duties. This limit is 800 dollars (around 720 euros) in the US and 150 euros in the European Union.
This facility, which has saved armies of inspectors and simplified trade, is due for a serious review. US President Joe Biden announced this himself on Friday, September 13 while the European Union also has a project in this direction.
In Washington, the number of small packages entering the US rose from an average of 140 million a year a decade ago to 1 billion by 2023. This has made it even more difficult to detect illegal items such as weapons or drugs. The reason for this sudden explosion in the number of packages is to be found in China. Trading platforms such as AliExpress, Shein and Temu have thrived since the health crisis, shipping packages at unbeatable prices directly from the manufacturer's factory to the customer, without intermediaries.
Of course, consumers have loved the onslaught of T-shirts and pants for less than 10 dollars or euros, but local competitors such as Zara or H&M in textiles less so, hence the flourishing of initiatives aimed at countering this ultra-fast fashion. We don't yet know the details of the measures and the height of the new ceilings that will be set, but this agitation bears witness to the hardening of trade relations with Beijing.
There's no strategic technology here, as in electronics or automotive batteries, just a reaction to the overflowing activism of companies in the Middle Kingdom. Confronted with the slump in consumer spending at home, they have been pulling out all the stops internationally, seizing every opportunity. On August 26, PDD Group, Temu's parent company, caused a stir by presenting exceptional results with sales up by almost 90%.
Founder Colin Huang's comment lit the fire. "In the future, this growth will inevitably come under pressure from increased competition and external challenges," he said. The whole of China is now wondering about its domestic market and the so-called external challenges that are threatening the country's economic rebound.