End of 'de minimis' rule hits Shein, Temu as Americans buy less
Consumer transactions, app downloads drop for Chinese e-commerce retailers
In this photo illustration of the Shein company logo, a Chinese online fashion retailer for adults and children is seen displayed on a smartphone screen. (Sipa via AP Images)
PAK YIU
August 21, 2025 21:15 JST
NEW YORK -- American shoppers are buying less and spending less time on Temu and Shein, Chinese e-commerce companies that have benefited from duty-free treatment for low-value goods, a measure that is set to end Aug. 29.
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The Diplomat
3 hours ago
- The Diplomat
The Quad's Role Amid China-US Tech Competition
The global implications of the China-U.S. tech rivalry have raised the imperatives for Quad cooperation on AI and semiconductors. From left, Japanese Foreign Minister Iwaya Takeshi , Indian External Affairs Minister Dr. S. Jaishankar, Australian Foreign Minister Penny Wong, and U.S. Secretary of State Marco Rubio meet at the Department of State in Washington, D.C., July 1, 2025. In July 2025, the Quad Foreign Ministers' Meeting concluded with announcements on strengthening maritime and transnational security, economic security, cooperation on critical and emerging technologies, and humanitarian assistance across the Indo-Pacific region. A significant takeaway of the convening was the launch of the Quad Critical Minerals Initiative to strengthen cooperation on securing and diversifying critical mineral supply chains. The joint statement by the foreign ministers of Australia, India, Japan, and the United States underscored concerns over 'abrupt constriction and future reliability of key supply chains, specifically for critical minerals.' They raised concerns about dependence on 'any one country for processing and refining critical minerals and derivative goods production,' which may lead to 'economic coercion, price manipulation, and supply chain disruptions.' This development came amid global manufacturers raising alarms over China's April 2025 decision to mandate licenses for export of rare earth alloys, mixtures, and magnets. China's action followed its trade tensions with the U.S. – at the time, the Trump administration had mandated export licenses for a wider range of chips used in artificial intelligence (AI) applications and limited China's access to chip-designing software. Amid China's bilateral trade and tech tensions with the United States, its decision to restrict rare earth exports impacted global supply chains and manufacturing (unlike China's December 2024 export ban on gallium, germanium, and antimony for the U.S. alone). In addition, the move highlighted Beijing's willingness to leverage its dominance in production and refining of critical minerals. Such instances of the China-U.S. tech rivalry resulting in implications for the world have raised the imperatives for deeper tech cooperation among Quad members. The first Trump administration (2017-21) used export controls to limit the flow of tech components to China, barred the use of federal funds to purchase Chinese tech equipment, and indicted Chinese tech companies for espionage activities. While the Trump administration used these measures against China's 5G equipment, the U.S. under President Joe Biden expanded the scope to also include other technologies. Under its 'small yard and high fence' policy, the Biden administration (2021-2025) employed the Trump playbook and hailed export controls as 'a new strategic asset in the U.S. and allied toolkit.' As a result, the Biden administration surpassed the Trump administration's tally of Chinese companies added to the U.S. Commerce Department's 'Entity List.' Moreover, the Biden administration expanded the scope of restricted technologies to include semiconductors and also addressed Chinese 'overcapacity' in clean energy tech (including solar cells and batteries). The current Trump administration (2025-present) has followed through on the Biden administration's tariffs on Chinese semiconductors (starting January 2025) and the December 2024 Section 301 probe into Chinese semiconductors used in American consumer products. Moreover, with DeepSeek highlighting China's advances in the AI domain, the Trump administration built on Biden's 2022 and 2023 restrictions on export of AI-relevant chips to China. This included the April 2025 action on mandating export licenses for less-powerful variants of AI-relevant chips (which the Biden administration backed down from acting against) and the May 2025 restrictions on China's access to chip-designing software. The China-U.S. tech rivalry, now well into its ninth year, has had global implications. Recently, Malaysia began mandating permits for export of U.S.-origin AI-relevant chips to clamp down against transshipment of components to China. Similarly, Singapore has cracked down on individuals allegedly involved in routing of Nvidia's chips to China's DeepSeek. The Trump administration has also continued pursuing the Biden-era goal of seeking compliance from Japanese and Dutch companies on curbing China's access to semiconductor equipment. In addition, the Trump administration's decision to rescind the Biden-era 'AI Diffusion Rule' has led to a scramble from nations seeking AI-relevant chips. The Biden-era rule had defined limits on export of semiconductors for nations categorized into three tiers. The Trump administration's decision to not adopt this framework has led to a country-by-country approach, which was on display during Trump's visit to the Gulf in May 2025. While hosting Trump, Saudi Arabia and the UAE finalized one-on-one agreements on access to American AI-relevant chips and partnerships with U.S. tech companies on AI infrastructure. Ahead of the Quad Summit in India later this year, there is immense scope for further refining AI cooperation among Quad nations. This may include a deeper focus on AI through research partnerships, cross-pollination between incubators, exploring joint workforce development programs, etc. Beyond research partnerships and institutional linkages, these steps can overtime develop bridges between Australian, Indian, Japanese, and American tech ecosystems on the mobilization of talent. Given the recent developments on the China-U.S. tech rivalry, Quad nations may explore a 'Joint AI Readiness Assessment' to determine areas of relative strength and areas of cooperation. This can be along the lines of the bilateral assessment on semiconductors announced by the U.S. Semiconductor Industry Association (SIA) and India Electronics Semiconductor Association (IESA) under the India-U.S. initiative on Critical and Emerging Technologies (iCET). Such an assessment may also draw from the Memorandum of Cooperation for the Semiconductor Supply Chains Contingency Network, which was finalized during the Quad Leaders' Summit in September 2024. Similarly, at the Quad Leaders' Summit in May 2023, the Quad nations finalized the Quad International Standards Cooperation Network and the Quad Principles on Critical and Emerging Technology Standards. This effort to synergize standards across the tech ecosystems of Australia, India, Japan, and the United States may now also consider a similar undertaking on operational matters. This may include sharing of best practices on regulatory compliance mapping, upkeep of databases on licensing records, investment screening mechanisms, etc. This can also be a focus area under the Track 1.5 dialogues on AI and Advanced Communications Technologies, which were announced by the Quad in 2024. Finally, the Quad nations have rightly committed to harnessing AI to empower farmers under the Advancing Innovations for Empowering NextGen Agriculture (AI-ENGAGE) initiative. This initiative exploring AI's applications at the ground level now also requires institutional heft, in terms of cooperation agreements between agri-tech companies, universities, research centers, etc. This may require financing from existing efforts like the Quad Fellowship's expanding donor base or the Quad Investors Network (QUIN), which was launched at the 2023 Quad Leaders' Summit. Given the initiative's aim to use AI for developmental needs, AI-ENGAGE can assume a central role in Quad tech cooperation, even as the China-U.S. tech rivalry raises regulatory and compliance-related challenges across the world.
The Diplomat
3 hours ago
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Trump's Tactical Concessions on Taiwan Are Not Strategic Retreats
The Trump administration's recent decisions to quietly sideline two high-profile visits by Taiwanese leaders have raised concerns in both Washington and Taipei, raising doubts about the U.S. commitment to Taiwan. But these moves – postponing President Lai Ching-te's New York stopover and canceling a meeting between Taiwan's defense minister, Wellington Koo, and U.S. officials – are more likely about short-term trade diplomacy. History has shown that it may be too early to assume that Trump's concessions on Taiwan represent a fundamental, long-term shift in U.S. policy. First of all, the timing matters. In mid-July, as reports surfaced of Taiwanese President Lai Ching-te's planned stopover in New York, Beijing immediately voiced its protests – a common practice. Meanwhile, U.S. and Chinese officials were preparing for a round of trade talks in Stockholm. This marked the third round of negotiations, following the June talks in London that attempted to repair the short-lived agreement reached in Geneva in May. As a result of these successive negotiations, tariffs that had soared into triple digits were now trimmed, Washington eased export restrictions on Nvidia's H20 AI chips, and Beijing resumed rare-earth shipments to the United States. In the context of this tentative détente, the White House advised Lai to postpone the stopover in New York and quietly hold off on Taiwanese Defense Minister Wellington Koo's visit to Washington D.C. By demonstrating symbolic restraint, the Trump administration appeared to be signaling a willingness to create a more conducive atmosphere for a potential summit between U.S. President Donald Trump and China's President Xi Jinping. This is not the first time Trump has leveraged the Taiwan issue in an attempt to de-escalate tensions during trade talks. In 2019, the Trump administration delayed a long-anticipated fighter jet sale to Taipei – an action widely interpreted at the time as an effort to improve prospects for a trade deal with China. However, that overture collapsed a month later when the administration raised tariffs from 10 percent to 25 percent on $200 billion of Chinese goods after futile talks between Washington and Beijing. By the end of his first term, Trump had approved more arms sales to Taiwan by value than any of his predecessors since 1990. This precedent suggests that the latest moves by the Trump team are more likely short-term tactical adjustments rather than indicators of a long-term recalibration of U.S. policy toward Taiwan. As in his first term, for Trump flexibility on Taiwan remains a bargaining instrument that can be dialed up or down depending on the state of negotiations. Moreover, given both Trump's own unpredictability and the fact that bilateral trade talks are still in flux, these gestures are unlikely to signal a lasting shift – and could easily be reversed. Moreover, Trump has largely adhered to the long-standing U.S. policy of 'strategic ambiguity' regarding Taiwan. Asked in February whether the United States would defend the island, he demurred: 'I never comment on that.' Even before taking office, Trump framed his response similarly, emphasizing flexibility: 'I never say… I have to negotiate things, right?' Those non-answers are in fact in line with U.S. practices in the past four decades: keep options open and refuse to pre-commit to any specific response to a military move by Beijing against Taiwan. While Trump himself keeps the message deliberately vague, his senior Cabinet officials have at times drawn a clearer line of deterrence. In a July interview, Secretary of State Marco Rubio stated: 'We remain as committed as ever to our partners… in places like Taiwan.' And at the Shangri-La Dialogue in May, Defense Secretary Pete Hegseth warned bluntly about the Chinese military's threat to Taiwan and the need to accelerate preparations. Actions may speak louder than words. In June, senior Taiwanese officers were invited as observers to learn from a U.S.-led multilateral air exercise in Alaska, showcasing continued U.S. security assistance to Taiwan. In February and April, the Trump administration sent U.S. naval ships to the Taiwan Strait – a routine practice demonstrating U.S. deterrence and reassurance toward Beijing and Taipei, respectively. The Trump administration has also pressed to accelerate deliveries and clear the years-long backlog of approved arms for Taiwan. Nor is the White House the only actor that matters in shaping U.S. policy toward Taiwan. Members of Congress have long set guardrails, which are grounded in the Taiwan Relations Act, to uphold U.S. commitments to the island. Lee Teng-hui's 1994-95 saga is the textbook example of congressional influence. When the Clinton administration allowed Lee only a refueling stop in Honolulu, lawmakers bristled and exercised their legislative authority to compel the State Department to relax transit rules. Similarly, in 1995, when the White House tried to head off Lee's 'private' visit to Cornell, Congress passed 53 by lopsided margins urging approval. Faced with near-consensus, President Bill Clinton reversed course yet again. Congressional support endures and has intensified in recent years. From 2017 to 2023, lawmakers introduced 124 Taiwan-related bills, double the number introduced in the prior eight years. Congressional delegations show the same trend: while trips to Beijing outnumbered visits to Taipei before 2020, the flow has reversed since then. Although Republicans have refrained from criticizing Trump's recent moves sidelining Taiwan, their silence has not precluded the upcoming congressional delegation to Taipei led by Sen. Roger Wicker (R-MS), chair of the Senate Armed Services Committee and a longtime advocate for Taiwan. In short, the Trump team's decisions to postpone Lai's New York transit and reschedule Koo's visit are likely tactical steps to protect a fragile trade track, instead of a strategic retreat on Taiwan. The administration's past actions suggest these gestures may be reversible, particularly if trade talks stall, and Trump's public statements continue to align with the doctrine of strategic ambiguity. Meanwhile, continuity in Taiwan-U.S. military cooperation and congressional support remain key sources of assurance and deterrence in the Taiwan Strait.
The Diplomat
3 hours ago
- The Diplomat
Why China Isn't Sweating Europe's Rebalancing Push
The failure of the China-EU Summit was actually a reflection of Beijing's confidence in its ability to manage ties with Europe without having to compromise. From left to right: Antonio Costa (president of the European Council), Xi Jinping (president of China), and Ursula von der Leyen (president of the European Commission) at the China-EU Summit in Beijing, July 24, 2025. In late July, Xi Jinping hosted top EU leaders Ursula von der Leyen and Antonio Costa in Beijing for the 25th China-EU Summit. The meeting followed a months-long charm offensive, in which Beijing urged the European Union and its member states to work with China to shelve trade disputes and focus on preserving fraying global supply chains. In the months before the meeting, Beijing made an uncharacteristic show of restraint, refraining from striking back harshly against a steady drumbeat of European probes and restrictions targeting Chinese industry. Chinese officials even floated the idea of reviving the long-stalled Comprehensive Agreement on Investment, put on ice back in 2021 amid a spat over China's treatment of minorities in Xinjiang. Ultimately, China's diplomatic blitz failed to impress European policymakers who wanted Beijing to concretely address their growing anxieties around overcapacity, infrastructure security, and unfair competition. Weeks out from the summit, hopes that a face-to-face meeting between Chinese and European bigwigs could achieve a breakthrough evaporated. In June, the EU walked away from a scheduled economic and trade dialogue, citing China's lack of progress in adequately addressing the bloc's core complaints. China subsequently canceled the second day of the China-EU Summit, in recognition of the diminishing likelihood of meaningful progress. In the end, the summit produced little besides a boilerplate statement on climate cooperation and an EU commitment to 'take proportionate, legally compliant action to protect its rightful interests' from Chinese competition. At first blush, China's failure to meet the EU halfway seems like a missed opportunity. With some concessions, Beijing could conceivably have enlisted Brussels as an ally in a common struggle against U.S. protectionism. Instead, the failure to get to yes on key trade issues like the EU's tariffs on Chinese electric vehicles (EVs) and China's export controls on rare earths likely means adapting to a period of protracted partial decoupling. Indeed, French President Emmanuel Macron spoke for many European policymakers when he warned of 'excessive dependencies on both the U.S. and China' and an urgent need to 'de-risk our economies and societies from this dual dependency' during a July visit to the United Kingdom. But Beijing is unbothered by the failure of its European charm offensive, confident that the long-term outlook favors China. So far, EU rebalancing efforts targeting China have been modest; a far cry from the sweeping restrictions implemented by successive U.S. administrations, which have prompted a more robust Chinese response. With Brussels now having signed a punishing trade deal with Washington, Beijing has judged that European leaders are unlikely to open a second trade war front and that China's interests are better served by dialogue than retaliation. In mid-August, China pulled yet another punch, extending its anti-subsidy probe into EU dairy by six months, indicating continued strategic patience toward Europe rather than a punitive change of tack. Moreover, Europe's de-risking drive has targeted some of China's most dynamic industries, particularly clean tech, and will do little blunt their long-term competitiveness. Brussels' imposition of anti-dumping duties of up to 35.3 percent on Chinese EVs last October was not enough to prevent Chinese automakers from achieving a 91 percent year-on-year growthh in European sales in the first half of 2025. Likewise, EU probes into Chinese solar and wind power equipment appear to be more bark than bite. China dominates solar supply chains and although Europe is largely self-sufficient in wind energy production, the EU will need to rely on more affordable Chinese-made components in coming years or risk failing to achieve its own ambitious greening goals. While it can't be ruled out that the EU will adopt a more aggressive industrial policy to address its 'dual dependencies,' Beijing is optimistic about its long-term odds in the EU market and sees no reason to pre-emptively reign in its domestic industry to mollify Brussels in the short-term. Rather, Chinese policymakers will play the long game, calling for dialogue and deepening trade and investment ties with individual EU countries in an effort to outflank the bloc as a whole. China is betting that Brussels will be unable to effectively impose its hawkish line on member states. The failure of the China-EU Summit, then, was not a failure of China's European strategy, but a reflection of Beijing's confidence in its ability to manage ties with Europe without sacrificing anything it doesn't want to give.
