A row of white concrete buildings near the Pearl River in southern China One of the fastest growing industries in the world: gritty workshops stir cheap clothing exported directly to homes and small businesses around the world It’s there. No customs duties will be paid and no customs inspection will be conducted.
Workers making these products make just $5 per hour, including overtime, for work days that could last more than 10 hours. They pay $130 a month to sleep in a bunk bed in a small room above a factory packed with sewing machines and stacks of cloth.
“It’s a tough job,” said Zua, who sews her pants seven days a week at a factory in a vast, metropolitan city that spans the Pearl River.
The e-commerce giant has built close connections from international markets with workers like Wu, shaking retail and economies around the world.
The number of tax-free cargoes to the US has risen more than ten times since 2016, rising to 4 million parcels per day last year. Similar shipments to the European Union have climbed even faster, reaching one parcel a day last year. Tax-free cargo for developing countries such as Thailand and South Africa is also rising rapidly.
There is currently a global backlash. On February 4, President Trump ordered the suspension of tax-free entry for parcels containing items worth up to $800. Trump temporarily suspended an order that would give staff time to devise plans to deal with the mountain of plots that had started stacking up airports soon for testing.
Since taking office a month ago, Trump launched Fujirado, a trade measure, on Thursday, with an advisor on coming up with a new tariff level that takes into account the scope of trade barriers. However, permanent halts on tax-free cargo could be one of the most widespread moves. These shipments include not only 10% tax on all goods from China, but many other tariffs that have accumulated over the years, but not just his new tariffs, as well as his new tariffs, I’ve put on a skirt.
The US actions regarding the shipment of so-called de Minimis – low value plots that do not bother customs services inspect or calculate customs duties – were one of many. Last summer, South Africa imposed a tariff of 45% on even the smallest imports of clothing. Thailand has ended its exemption from low-value import parcels from sales tax, but continues to allow customs-free admission for parcels up to 1,500 Thai baht ($44). The European Commission, the European Commission, proposed this month to end tax-free treatments in 27 countries for packages worth up to 150 euros ($156).
Countries cite various reasons for restrictions. Trump allegedly cleaned up customs inspections, which resulted in the tax-free plots becoming conduits for fentanyl and related materials to enter the United States. The European Commission said it needs to ensure the safety of products in imports, stop counterfeit products and prevent unfair competition. South Africa and Thailand acted to protect local shopkeepers.
“We have an obligation to ensure that products entering our markets are safe and that all traders respect consumer rights,” said European Commissioner Michael McGrath.
This corner in southern China near Hong Kong has been a low-cost manufacturing hub, especially for exports from apparel, since the 1980s. However, the rise of e-commerce sellers around the world is creating ever-growing demand for such shipments.
Guangzhou has emerged as the global hub for de Minimis shipping. Over many square miles of town, fast fashion clothing is made of concrete buildings with sewing shops, and sometimes there are residential areas above it.
Shein and Temu are Chinese e-commerce giants who hold at least a third of the De Minimis industry, coordinating much of their supply chain from large offices in Guangzhou. Amazon has introduced its own De Minimis business, Operations, for shipping from China.
China’s smallest industry is not limited to Guangzhou. It is also not limited to clothing, which is the industry’s mainstay.
Yiwu, a city 600 miles northeast of Guangzhou, has become another hub with a vast wholesale market. Adjust exports of toys, hats and other small items from towns scattered across the Youngz River Delta.
In particular, Shein presents herself as a new business concept, connecting far-off customers with the factory, ready to cut and sew almost anything. Working with 5,000 workshops and small factories across China, Shen’s approach almost completely eliminates store inventory, or the need for store and retail staff.
“At Shein, we empowered thousands of small businesses and rethinked the supply chain by giving customers complete insight into what they want and need,” the company said on its website.
However, Guangzhou workshop owners complain that Shane is too harsh.
Li Zhi’s workshop produced clothing for Shein contractors four years ago, but the arrangement lasted only a year. “Sheen demands high quality, but offers low prices,” she said as she rearranged the lace fabric on the table.
She now sells instead to wholesalers in the Chinese domestic market. But the lack of blue-collar workers has left businesses still challenging as they sent a daily recurring fee of nearly $70 from $48 four years ago.
In China today, almost two-thirds of 18-year-olds are enrolled in college, up from 10% in 2000.
“Business gets worse every year,” Li said. “We have a small number of workers today. Most of them were born in the 70s and 80s.”
If Trump permanently terminates the de minimis rules, imported apparel, which is now tax-free, will be subject to basic tariffs of 3-30% plus the 7.5% tariffs imposed during his first term. And you will be subject to a 10% customs duties on all imports. In addition to that, there is a customs processing fee of between $5-20 per parcel from China, which the president imposed on February 4th.
Shein said its supplier paid workers twice the local minimum wage. Temu said nearly 60% of its US sales came from American warehouses with cargo passing through customs, and tariffs were paid.
The competitive advantage of China’s DE Minimath export industry is that it avoids customs duties and exceeds cleaning customs inspections. Over 90% of Chinese cotton is grown in Xinjiang, a region in the northwest of China. Many Western governments have been arrested by Chinese security agencies and evidence of forced labor was arrested there among the region’s predominantly Muslim ethnic groups, particularly Uighurs, and there, after which evidence of forced labor was arrested there. We are beginning to restrict or prohibit the import of content.
Homes and small businesses purchasing minimal plots from China are legally responsible for ensuring there is no packages or cotton or other content from Xinjiang. However, Western regulators were reluctant to bring about charges.
In contrast, large retailers generally comply with new jiang-related laws when importing large amounts of clothing containers for stores.
The Guangzhou workshop owner said he didn’t know where the fabric suppliers got the cotton.
Yun Kemping, owner of a Guangzhou sewing shop that supplies the Thai market, said he and other merchants needed to export.
“If you don’t accept the trade,” he said, “There’s nothing else to do.”
Jordyn Holman contributed to the report from New York. You contributed to your research.
