Donald Tang, Shien’s executive chairman, has previously called for equitable reforms to “de minimis.”
“Looking ahead, revenue growth will inevitably face pressure due to intensified competition and external challenges,” Jun Liu, PDD Holdings’ financial chief, said in a press release. “Profitability will also likely…be impacted as we continue to invest resolutely.”
The intensified competition Liu referred to will come in the form of Tik-Tok Shop and its competitor Shien as well as a planned low-cost Amazon storefront. As for the external challenges, Temu is facing scrutiny over its use of import trade loopholes, questions over the quality and origin of its products, adherence to product safety, and questions about whether it sells products made by forced laborers from several governments.
“Shein believes the de minimis framework should be reformed to create a more level, transparent playing field—one where all retailers play by the same rules and where the rules are applied evenly and equally, regardless of where a company is based or ships from.” Tang wrote.
In February, Sen. Sherrod Brown (D-OH) and Sen. Rick Scott (R-FL) called on President Joe Biden to use his executive power to close that particular trade loophole in the name of assisting American manufacturers.
The senators continued, “The existence of this U.S. policy loophole also unfairly benefits foreign companies and overseas e-commerce platforms such as Temu, SHEIN, and AliExpress, allowing them to evade tariffs, duties, taxes, and compliance with other U.S. customs laws and regulations that U.S. companies and brick and mortar stores must comply with. There are no consequences for these actions because they are currently legal under the outdated and convoluted ‘de minimis’ loophole.”
However, much like the panic from lawmakers around China and Tik-Tok regarding data usage, some of these concerns gloss over how American companies also use the loophole for the furtherance of their own ends, just as American companies like Google often play fast and loose with consumer data for their benefits.
As Jason Goldberger, the chief commerce strategy officer at Publicis Groupe, told Fortune, “There’s no white hats and black hats in any of this. It’s all shades of gray.”
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Source: Black Enterprise
