The rise of direct foreign access to U.S. consumers via e-commerce is creating a new economic imbalance, threatening U.S. businesses, tax revenues, and consumer safety. This proposal aims to curtail the unchecked flow of goods from foreign companies—primarily from China—that leverage cost advantages to undercut American sellers while avoiding taxes, tariffs, and regulatory oversight.
Section 1: Problem
The explosion of e-commerce has allowed foreign companies to bypass traditional retail channels and sell directly to U.S. consumers without meaningful oversight. This displaces U.S. businesses, undermines entire e-commerce industry verticals, and erodes American competitiveness.
The impact extends beyond lost income for U.S.-based sellers. The supporting ecosystems of these businesses—such as digital marketing agencies, shipping and warehousing companies, technology companies, and customer service firms—are also significantly affected. This creates a cascading effect that reverberates through various industries, substantially reducing domestic economic growth and job creation.
Furthermore, the profits generated from this significant economic activity are funneled to foreign-owned businesses, which often fall outside of U.S. federal tax jurisdiction, depriving the U.S. government of substantial tax revenue.
Foreign businesses also exploit loopholes to avoid paying tariffs and sidestep consumer protection regulations, creating significant consumer risks. Consumers often have no effective mechanisms for recourse or remedy in cases of faulty or dangerous products. Single-parcel shipments into the U.S. make oversight nearly impossible, allowing foreign entities to engage in widespread non-compliance, all while depriving the U.S. government of critical tax revenue.
Section 2: Purpose
This policy aims to safeguard U.S. economic interests by regulating direct-to-consumer foreign e-commerce sales and foreign-owned online marketplaces. The goal is to protect American businesses and ensure proper oversight of products entering the U.S. market.
The intent of this Act is to:
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Restrict non-U.S. businesses and sellers from participating in U.S. e-commerce platforms or otherwise selling directly to American consumers.
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Protect U.S.-based businesses and prevent displacement caused by foreign competition.
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Close loopholes and ensure proper enforcement of U.S. tariffs, safety standards, and consumer protection laws.
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Recapture federal tax revenues being lost due to the significant displacement of U.S. e-commerce businesses, brands, and the industry verticals that support them.
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Prevent non-U.S.-owned e-commerce platforms from facilitating sales to U.S. consumers, ensuring that only U.S.-owned marketplaces can operate in the U.S. market.