[Source/Observer Network Qi Qian] According to Bloomberg and the Yomiuri Shimbun on May 20, the Japanese government may follow the United States and is considering revising the tax-free policy for small packages (valued under 10,000 yen, approximately 500 yuan RMB), targeting Chinese e-commerce platforms Shein and Temu.

The Cabinet Office of Japan stated that last week, the government's tax expert panel discussed issues related to the current tax-free policy for small packages sent to Japan.

The Ministry of Finance also disclosed that it has begun considering revising the "minimum exemption," which exempts import duties and consumption taxes on small items, and plans to levy consumption taxes on these goods. The Yomiuri Shimbun reported that compared to customs duties, the government prefers levying consumption taxes on small packages, as it is concerned that imposing customs duties would increase the workload of customs staff.

According to reports, if the tax-free policy is revised, small packages purchased from Chinese e-commerce platforms such as Shein and Temu may need to pay sales tax upon entering Japan, with a typical rate of 10%. Currently, parcels valued under 10,000 yen are basically exempt from taxes.

On the local time of the 20th, Japanese Finance Minister Kato Katsunobu told reporters: "Regarding the tax-free review, no decision has been made yet. However, we will continue to consider this issue while paying attention to overseas cases and their impacts."

Long lines outside a new Tokyo Shein store opened in 2022, according to Japanese media.

In recent years, Chinese e-commerce apps like Temu and Shein have rapidly developed globally. According to data from research firm Sensor Tower, Temu became the most downloaded mobile e-commerce application in 2024, with 550 million downloads, followed by Shein.

Previously, some foreign media believed that the business model of Chinese e-commerce benefited from the "minimum exemption," which exempts tariffs on packages below a certain quantity or value. However, apart from Chinese e-commerce, American retailers such as Amazon and Walmart also utilize this mechanism to import goods.

Data from Japan’s Ministry of Finance shows that last year, there were a total of 169,660,000 small packages imported into Japan with a value of less than 10,000 yen (approximately 21.2 billion yuan RMB), an increase of five times compared to 2019; among packages entering Japan, small packages accounted for about nine out of ten. Bloomberg reported that Japan believes canceling the tax-free policy could also benefit the country's public finances.

Bloomberg chart

As Temu and Shein have rapidly expanded, these two e-commerce platforms have become thorns in the eyes of Western governments.

According to Bloomberg, the EU proposed abolishing the tax-free policy for parcels valued under 150 euros around 2027-2028. Subsequently, the UK announced it would review the country's "minimum exemption" policy. France even proposed, as a temporary measure before broader European reforms take effect, to charge fees for small packages from discount retailers.

In January, former US President Biden proposed tightening the "minimum" tax-free threshold for low-value (under $800) imports. After Trump came to power, he ignited trade wars globally, severely affecting Americans who relied on relatively inexpensive Chinese products. Previously, he announced a 145% tariff on Chinese imports, and the "small exemption" policy expired on May 2nd.

CNN and Bloomberg noticed that on April 25th, before the new tariff took effect, Temu and Shein raised prices on a large number of items ranging from lawn chairs to swimsuits. Shein almost doubled the prices of all categories of goods on its platform, with some items seeing price increases of more than double; the biggest price hike was for kitchen paper towels, at 377%.

This means that even "cheap products" on Temu and Shein are no longer within easy reach for American consumers. Data shows that about 48% of small packages were sent to the poorest areas of the US, while only 22% went to the wealthiest areas.

From May 10th to 11th, high-level economic and trade talks between China and the US were held in Geneva, Switzerland. Both sides agreed to reduce tariffs within 90 days, lowering the rate by 115%. Reuters reported on May 14th that according to White House executive orders and industry experts, the US tariff on small packages from China dropped from 120% to 54%, and then further reduced to 30%.

"It's obvious that (former US President) Trump blinked first, whereas China has not made any significant or notable changes to its policies," noted US economist Larry Summers in an interview with CNN on the 12th. "Sometimes, taking a step back opens up vast horizons. When you make a mistake, the best course of action is usually to correct it, even if it brings some embarrassment."

This article is an exclusive contribution from Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7506474464814400050/

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