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The days of cheap prices for Chinese e-commerce companies is likely coming to an end.

Now, the White House is moving to close a trade loophole.

It's being used by Chinese online marketplaces like

Shien and Temu, which will eliminate the ability of these companies to sell at their significantly

reduced prices.

Now, first, let's look into what Chinese companies like Temu and Shian are doing.

They avoid paying duties and tariffs normally levied on Chinese imports by selling and shipping to the United States these low value products by using the de minimis exemption.

Normally that's applied to items that were worth $800 or less.

And it wasn't just duties or taxes and so on.

The de minimis loophole also allowed these packages to come in with less scrutiny than usual.

And this became a major problem, as according to the White House,

quote, the majority of shipments entering the United States claiming the de minimis exemption

originate from several China-founded e-commerce platforms.

And it notes these numbers exploded over the last 10 years.

The number of shipments entering the United States claiming these de minimis exemption

has increased significantly from approximately 140 million a year to a year to over one billion a year.

Now, the White House is planning to close that loophole.

In an announcement on Friday, the White House is proposing a new rule that will deny

the de minimis exemption to packages

coming in from China that would otherwise be subject to tariffs. One example

is Chinese clothing. Approximately 70% of textile and apparel imports from

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