The US has proposed regulations that would impose new taxes on many low-value shipments from China – a measure designed to stem the flood of packages from shopping sites such as Shein and Temu.

The Biden administration said the plan was intended to prevent “abuse” of an exemption that allowed packages worth less than $800 (£600) to enter the US without tariffs and other fees.

The US said the de minimis rule helped companies like Shein and Temu, which typically ship directly from manufacturer to customer, undercut their competitors with lower prices.

In statements, the two companies defended their business models.

To facilitate trade and allow U.S. authorities to focus on higher priority shipments, in 2016 the U.S. increased the exemption from customs duties and other fees for shipments from $200 to $800.

But lawmakers have increasingly expressed concern about “exploitation” by companies like Temu and Shein, which are rapidly gaining ground in the U.S. market.

The new rules would remove the exemption for Chinese goods currently subject to US tariffs, which cover a wide range of products including shoes, machinery and 70 percent of textiles and clothing.

They would also increase the amount of information that senders must provide to the authorities.

Temu said its success was due to an “efficient business model that eliminates unnecessary middlemen and allows us to pass savings directly to our consumers.”

The company said it is currently reviewing the regulations and remains committed to “providing added value to consumers.”

“Temu’s growth does not depend on the de minimis policy,” it added.

Shein said the company’s success was due to its “on-demand business model” and that the company supported reform of the de minimis exemption so that the rules were applied “evenly and consistently.”

The company said compliance is a priority and that it is already participating in a pilot program with U.S. Customs and Border Protection (CBP).

“We want to disclose more about the contents of each package and are working closely with CBP,” the company said.

Since their launch several years ago, Temu and Shein have gained a following with eye-catching Super Bowl commercials and ultra-low prices.

The popularity has put so much pressure on Amazon, the dominant e-commerce company in the US, that the company Reportedly exploring its own discount unit with a focus on direct deliveries to consumers.

Their rise has also attracted the attention of US politicians and regulators, who have raised questions about the the security of the products on their websites And warned There is a “high risk” that Temu is selling products that were manufactured using forced labor.

Authorities attribute this success to the strain on U.S. Border and Customs Enforcement as the number of packages entering the U.S. under the de minimis exemption rose from 140 million in 2013 to over a billion last year.

In announcing the measure, the Biden administration said that “several e-commerce platforms founded in China” were now responsible for the “majority” of shipments below the $800 threshold.

The measures are a response to an “exponential increase in de minimis deliveries”, which has made it difficult to identify and block illegal deliveries, it said.

She accused the companies of trying to circumvent consumer protection laws and avoid trade barriers.

“American workers and businesses have the ability to outperform anyone else on a level playing field, but for far too long, Chinese e-commerce platforms have evaded tariffs by abusing the de minimis exemption,” said Commerce Secretary Gina Raimondo.

The American Action Forum, a right-wing political group, has estimated that completely eliminating the $800 exemption “would result in additional annual costs of between $8 billion and $30 billion that would ultimately be passed on to consumers.”

The proposal will go through a comment period before it is finalized and comes into force.

Authorities in the European Union are considering similar measures for low-value shipments, Bloomberg and the Financial Times reported beginning of the year.

Shares of PDD Holdings, which owns Temu, fell more than 2 percent following the announcement.