Fast Five Shorts | What Are The Long-Term Ramifications Of Ending The "De Minimis Exemption"

 Shipments worth less than 800 from China are no longer eligible for a special U S customs exemption. According to chain storage. Again, the Biden Harris administration is addressing what it calls the quote significant increased abuse and quote of an important exception for lower value goods by China founded e commerce platforms and a new executive action, president Biden is making any import ship and subject to us, China tariffs and eligible for the de minimis tariffs.

Exception. The special exception had eliminated duties and taxes on imported shipments with an aggregate value of less than $800. And also allow them to enter the US while revealing less information about the contents than other imported shipments. Uh, Chris, you need to put on your best us, uh, representative hat right now, and tell me what you think the long-term ramifications will be.

From the ending of the De Minimis Exception. De Minimis, uh, nice Latin pronunciation there too, Ann. I'm, I believe that's a Latin word if I'm not mistaken, but you know, I don't know. I would, I would imagine. Who knows? Who knows? I don't know. Trying to figure out words origins is all Greek to me, but all right.

I have no idea. Honestly, Ann, to answer your question, I have no idea where this goes in the long run, but God, I love. Thinking about the possibilities. That's how I'd sum this up. I think short term, you know, I have to think it's, it can't be good news for companies like Timu and Sheehan, like, or even Amazon and Walmart who have taken steps to set up their marketplaces to ship factory to door in a similar fashion to both those companies.

So, but then I get to thinking. You know, how does this law morph over time? You know, will us based importers still get this special exemption if they agree to be held accountable to the liability and safety standards that they have traditionally stood by, which means that, you know, could Walmart still direct ship from factories as an importer of record with the longer shipping lead time in exchange for a lower price?

The end consumer, I think. There have a lot, there are a lot of us consumers who would be willing to make that trade off. They'd be willing to wait for product if they could get it cheaper. So, so my prediction is that in the short term, it hurts the Chinese based marketplace manufacturers, but in the long run, we could see the laws adapt to help spur us based retailers to be more successful and deflects their supply chain power even more.

That's my current take. Yeah. I mean, I. I dug into a lot of commentary on this and the thing that really resonated most with me. Um, I was listening to, um, Scott Galloway talking about this actually. And I think I agree with like what his opinion of this was. And that was really that, you know, well, yes, this might help some of the U S based companies that are doing this.

It might kind of temporarily level the playing field for them. I think that the, the core of this. Still. And while, you know, us retailers can't rest on their laurels here is that she moved, she moved, she moved and she, and I can't believe that she moved. Yes. She and in Timu, like their whole business models are still way more efficient than, than.

A lot of the companies get it. They're like, we're just getting into the marketplaces, the factory to consumer, like shipping and all these things here in the U S and I think that you still have to look at, you know, this, this change isn't going to like make this. So that she moved, she moved. I keep saying she moved.

She and a team who are like, you know, it's not going to totally disrupt their operations. They're still running more efficiently. There's, they've still have, they're still. Like heavily invested in technology to make sure that, you know, they're only producing the right amount of quantities that, you know, their shipping is getting so precise so that they can save money in all of those areas too.

So I think it's really a wake up call for the U S retailers to be looking at, like, how do we continue to invest in beating them at, you know, as competitors? All around. How do we invest in technology? How do we invest in processes and supply chain to make sure that, you know, we can, we can ultimately get into a competitive space with them.

I think this, this de minimis exception going away is not going to, not going to be something that makes a long term impact, um, in the competitive landscape between, you know, these U S retailers and these, these retailers from China. So I think, you know, It's something that you brought up manifest at the beginning, Chris, I think this is something that I'm, I'm excited to hear about at that conference to hear like how that industry, because that's the first time that I recall hearing about like the whole concept of factory to consumer shipping.

So I'm interested to hear like what the perspectives are of those experts here too, and hear what they think the impact is going to be on the industry. Yeah, no, you bring up a good point to, um, you know, I had the chance to speak with some people at Timu about a month ago. I got on a call with them, you know, early one morning and, and talk to them.

And, you know, as much as you is to your point, as much as they talked about supply chain, they also talked about the front end of their experience and the gamification of their experience and what's really differentiating. And so to your point, that's the part that the U S retailers still need to learn from and figure out, you know, what matters here within the U S.

So,