The rise of foreign sellers on Amazon presents challenges to US commerce, necessitating government intervention to ensure fair competition and protect consumer rights. This discussion is distinct from the ‘de minimis’ value issue. The focus here is on regulating foreign based direct sales practices on Amazon, Temu Shein, and online in general, not on adjusting import thresholds for the De Minimis Value.
Governmental steps like taxation or regulation on foreign Amazon sellers are essential for economic equity, consumer protection, and national security. Some potential solutions to address this:
Prohibit Direct-to-Consumer Sales From Foreign Owned Companies. This would force these companies to go through American distributors, potentially leveling the playing field.
Implement a Significant Tariff: Alternatively, imposing a substantial tariff, like 300%, on all direct-to-consumer sales from foreign entities could discourage price undercutting and ensure these companies contribute to the US economy in a more meaningful way, akin to domestic businesses.
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Economic Fairness
Level Playing Field: Foreign sellers often benefit from lower costs, skewing competition. Government taxes or regulations could adjust this imbalance, promoting fair trade.
Combatting Unfair Practices: From review manipulation to IP infringement, foreign sellers engage in practices that distort the market. Stricter enforcement would foster genuine competition. -
Consumer Safety and Trust
Quality Control: The risk of counterfeit goods is high with unregulated foreign sellers. Regulation would ensure products meet US safety standards.
Restoring Trust: Misleading information and fake reviews erode consumer confidence. Government oversight could enhance transparency and accountability. -
Economic Security
Local Job Support: Every dollar spent on foreign sellers through Amazon is potentially a dollar not spent on local sellers products that support US jobs and economies. By encouraging domestic seller purchasing through policy, we can bolster local economies, preserve jobs, and reduce dependency on foreign manufacturing.
Selling on Amazon is HUGE in China. In fact, by our own research, Chinese sellers make up over 63% of all third-party sellers on Amazon. And the number of Chinese businesses selling online to foreign consumers continues to soar – in 2023, cross-border e-commerce from Chinese sellers grew at 19.6%.
Sellers from the United States by comparison make up just 34.8% of all third-party sellers.
It’s also estimated that there are 1,500,000 active sellers on Amazon. So by doing some simple math, there are likely close to a million Chinese third-party sellers on Amazon.