by Rule allows shipments valued under $800 to enter US duty-free
I realize that here in furniture land, all eyes and ears have been focused on President Trump’s rollout of tariffs placed on incoming goods from Canada, Mexico and, of course, China.
However, I have not heard much about the Trump administration’s recent decision to eliminate the “de minimis” provision, which previously allowed shipments valued under $800 to enter the U.S. duty-free.
That surprises me a bit because I suspect that it can have significant implications for the furniture industry.
Initially, I think that offshore players like Temu, Shein and others that have enjoyed mercurial growth, in part, by leveraging this exemption, will face increased operational challenges.
Up until now, these retailers which were often shipping low-cost furniture directly from China, benefited from the de minimis rule to keep prices competitive.
With the removal of this provision, such shipments will now incur tariffs and require more complex customs procedures, potentially leading to higher costs and delivery delays.
This article from the verge.com gives a lot of specifics.
And, in case you don’t pay attention to sites like Temu, or don’t believe they are offering loads of furniture priced well under $800, click here to see for yourself.
Might this provide a leg up for domestic furniture makers? Maybe.
Domestic furniture manufacturers may gain a competitive edge as imported furniture becomes more expensive because of the new tariffs.
Facing now higher prices from online sellers like Temu, consumers might turn to U.S.-made products to avoid higher costs associated with imported furniture.
This shift could lead to increased demand for locally produced furniture, benefiting manufacturers in regions here in North Carolina.
Trump’s move to eliminate the “de minimis” provision could also leave domestic retailers banking on importing affordable furniture from China facing higher costs.
This price increase might affect sales volumes and profit margins, especially in the budget-conscious segment of the market.
While this move has yet to play out, I am betting that, at least for the near term, the elimination of the de minimis provision will have some disrupting impact on the supply chain, particularly for e-commerce retailers importing low-cost furniture from China.
While domestic manufacturers may benefit from reduced competition, U.S. retailers and consumers might be facing higher prices and potential delays in furniture availability.
And we need that now like a hole in the head.
Two Issues: The cost of shipping from China to the US is an old rule that allowed favorable rates for other countries to ship to consumers in the US. The $800 or less exclusion is part of the issue. The postal rates are so low it is unreal. You can ship from China to Dallas, cheaper than you can ship from Dallas to Austin. I have brought this up in several town hall meetings in my region of Texas. I have been told by congressmen and senators they would look into it. It is an absolutely massive amount of products that swamps our postal system with discounted rate packages. No wonder the post office cannot make money. We are subsidizing Chinese companies with discounted rates at our expense. I’ll save you the time, The The post office lost $9.5 Billion last year.
The 2nd part of this equation that was brought up in talks with China is the amount of Fentanyl brought into the US in this flood of packages. No one has any time to inspect the products.
This flood of products affects every single industry, including clothing, hardware, and retail and wholesale. Go to Temu and see what all they sell.. It is not just furniture.
Thanks for this insightful feedback, David. I don’t think many people are aware of these issues that you raise. Thanks for sharing them with us here at Home News Now.