What you don’t know about Shein, Temu and “Made in China”
With a new administration taking office and many expected changes, particularly when it comes to foreign trade. President Trump is all about Making America Great Again and our domestic workforce, taking care of Americans and ability to provide for their families. One thing is for sure that will be in focus over the coming months or year is a return to American manufacturing, Why is this significant and why it should matter.
What you most people don’t consider when purchasing products and why being “Made in America” really does matter for our future and our economy! Most of us shop online, but not all eCommerce business are equal. There is licensing, trademarks, shipping, manufacturing, packaging and the list goes on.
Have you ever bought from a company and wondered WHEN IT was going to arrive? Have you purchased from Shein and Temu? If so, chances are you understand it ain’t no Amazon shipping!
These companies are considered “De minimis.
First of all, the meaning of de minimis. It simply means of little value or insignificant value. The threshold for insignificant value in the case of packages crossing the U.S. border is $800.00. So some 4,000,000 packages a day pay no tariff or taxes.
Shei and Temu are responsible for more than a million packages a day and those packages pay no tariff or taxes. There is no review or audit that is applicable to de minimis shipments. This makes de minimis an ideal vehicle for smugglers.
Do you want a Gibson Electric Guitar that is not really a Gibson? Just google Chinese Gibson guitar and you are in business. Of course, the guitar you will receive is likely to be barely playable. Trademark violation and consumers getting cheated all in one package.” says Jay Arbetman of the Sourcing District.
Let’s say you are sewing in Kentucky where the federal minimum wage ($7.25) is applicable. Approximately 20 states have no minimum state wage so the $7.25 federal minimum is applicable. That will compare to the less than $2.00 an hour that many factory workers are paid in China. Many, though not all states, have state minimum wages far more than the federal minimum. Some city minimum wages range up to and over $20.00 an hour. Frankly, it is a miracle that anything gets sewn here.
How is this affecting retail stores? Let’s say you buy a dress from Shein and it is $19.99. If say, J.C. Penney goes to that factory, they may get a bulk discount and they may be shipping more efficiently. They will however work under the burden of tariffs and taxes that same dress from Shein is not subject to. Let’s say for example J. C. Penney pays $9.75 for the $19.99 Shein dress. That is likely to land in their warehouse for about $17.00. Then, J.C. Penney, puts the dress into their retail stores for say $39.99. None of this is precise but you get the idea. This is a very generalized description. “The devil is in the details”. At the end of the day, de minimis shipments enter the United States with less information than other imports and are not subject to duties and taxes.
An even more bizarre twist is that the factory in Kentucky or a distributor will then send the dress to you, and you will pay $15.00 or more in UPS or FEDEX ground charges. An American consumer can buy a “12 pack” of shipping coupons from Shein for less than $48.00. Ship it a few hundred miles. $15.00+. Ship halfway around the world. $4.00. How much sense does this make?
The truth is “you get what you pay for”. Price is a direct relationship with quality; the lower the price – the lower the quality. These de minimis companies are able to ship any order(s) to one single address a day without paying tariffs as long as it’s under the $800 threshold! This is a much higher threshold than other countries. I imagine with the new administration, this threshold will come down. But in the meantime, this hurts our big box retailers (because their purchases are in bulk or wholesale (think of how much Macy’s or The Gap buys at one time for all of their retail stores) and are subject to the import tariffs.
While anyone can purchase through these online stores direct from Chinese merchants through Temu, Shein and other trading companies, at super low prices because of poor working environments, cheap labor (or child labor). In these foreign countries, they don’t honor or regard one’s Intellectual Property such as their design or trademarks and there’s little to no enforcement. So, they steal your creation and under cut you as a business and sell a poor quality knock off – with your brand identity attached to it!
On the surface, import taxes might look harsh but reality is actually setting up American business, American manufacturers, American farmers and producers to be successful, profitable and to thrive and grow. This stimulates our economy and The U.S. in becoming more self substantiating, independent and a free country.
If you value ethical and humane treatment of workers and their environment, quality craftsmanship, you might want to take another look at your buying habits, and Buy Made in America! Put America first and the American people. The next time you see fabric or apparel made in the USA, stand up and applaud the makers who manage to succeed with an environment that is opposed to their success.
We believe in America being strong, independent and a free nation. We use American fabrics and materials as much as possible to manufacture at home in the USA! Shop Incognito Wear IX for your concealed carrywear. Never be a victim because of style.
