Sat, Jun 14, 2025 page8

• Taiwan should tax Chinese imports

  • By Chen Yung-chang 陳永昌
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  In Taiwan, some public policies closely follow those of other advanced countries with the intention of relying on adopting measures based on existing examples — essentially, copying a classmate’s homework. This approach stems from the self-protective instinct of public departments to minimize controversy, but often results in inescapable bureaucratic inertia.

  During Minister of Digital Affairs Huang Yen-nun’s (黃彥男) report on a cybersecurity bill at the legislature in April, Democratic Progressive Party (DPP) Legislator Tsai Chi-chang (蔡其昌) raised the issue of Chinese interference in the censorship of posts by users from Taiwan and Hong Kong on Meta Platforms. The Ministry of Digital Affairs — the responsible authority — said it believed it should wait for the US Congress to complete its investigation before deciding on an appropriate response, and that officials would “communicate with Meta” depending on the outcome.

  Tsai bluntly responded that there was no need to wait for the US, as Taiwan can act first. He pointed out that Taiwan, facing an imminent national security threat from a hostile foreign force, is in a far more precarious situation than a powerful country like the US.

  Tsai is absolutely right. There is no need to follow behind the US. Taiwan can and should act first on many fronts, one such example being the prompt cancelation of tax exemptions for small packages from China.

  US Customs and Border Protection data show that the number of de minimis packages rose to more than 1.36 billion last year, with more than 70 percent originating from China. The de minimis exemption refers to the US waiver of standard customs procedures and tariffs on packages with an aggregate value of US$800 or less and sent via postal or express courier services. US Customs handles more than 4 million de minimis parcels daily, most of them from Chinese online retailers. In the short span of less than a decade, the volume of duty-free parcels increased by more than 10-fold.

  On May 2, US President Donald Trump’s administration revoked the de minimis exemption, imposing a tax of 120 percent of a package’s value or a flat fee of US$100 on imports from China. The rates were cut following trade talks between the US and China later that month, and the current import tax rate stands at 54 percent of the package’s value, but the flat fee remains.

  The Trump administration’s new policy had an immediate effect upon implementation — daily users of Chinese retail app Temu in the US plummeted by nearly 60 percent last month, while fast fashion retailer Shein’s shrank by 25 percent. The two companies had no choice but to slash their advertising and marketing budgets in the US. The popularity of both apps, which were once at the top of download rankings, fell drastically and even dropped out of the top 100.

  As domestic demand in China is weak, dumping goods into overseas markets is its only viable escape route. In August last year, Chinese e-commerce platform Taobao launched a massive NT$2 billion (US$67.4 million) subsidy program in Taiwan, offering free shipping to convenience stores nationwide for 1 billion items.

  Taiwan’s domestic market was flooded with counterfeit goods that infringe upon intellectual property rights, baby clothes and toys containing plasticizers exceeding legal standards, cheaply made small household appliances that are prone to explode, and even illegal and prohibited goods. Cross-strait express mail services set a new record last year, reaching 20 million shipments — such services have become maritime freeways for cheap Chinese goods to pour straight into Taiwan.

  Although Taiwan could simply follow the US’ example, it still lags behind in its review of tax exemption policies for small packages, remaining forever stuck in the research and analysis stage. In contrast, Vietnam, which has also been adversely affected by Chinese e-commerce platforms, has taken a decisive step forward.

  About 4 million to 5 million low-value packages are shipped daily from China to Vietnam via e-commerce platforms, severely affecting the country’s small and medium-sized enterprises. In response, the Vietnamese government on Feb. 18 ended tax exemptions for low-value imported goods — a swift measure that outpaced even the US.

  Authorities in Hanoi have simultaneously strengthened controls on the origins of goods and materials, recognizing that a large volume of Chinese goods are routed through Vietnam to disguise their place of origin before being shipped to the US. Beginning in the third quarter, Vietnamese authorities plan to strengthen its monitoring system to prevent origin fraud and the illegal transshipment of Chinese goods.

  The US and Vietnam have both imposed taxes on small packages from China — what reason does Taiwan have to keep dragging its feet?

  Chen Yung-chang is a business manager.

  Translated by Kyra Gustavsen
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