Starting from February 4, 2025, new rules and restrictions regarding tariffs have been implemented in the USA — additional taxes of 10% have been introduced on goods imported from China. Furthermore, the de minimis exemption, which allowed for duty-free imports of goods valued at less than $800, has been eliminated. This was done to maintain market competition as well as ensure fair customs regulation.
These measures have had a significant impact on Temu and Shein, which were previously exempt from any tariffs and customs inspections due to the de minimis threshold. According to data released by a US Congressional committee in June 2023, Temu and Shein accounted for more than 30% of all packages shipped to the USA daily. After the new rules were introduced, the Temu marketplace took several actions: it began utilizing goods stored in US warehouses and started engaging local sellers in the USA.
As for Kazakhstan, it has often been mentioned that goods from the Chinese market, including those from Temu and Pinduoduo, pose significant competition for small and medium-sized enterprises (SMEs). Before Temu's entry, AliExpress had been operating in the Kazakh market for over 10 years, and Kazakhs also placed orders on Taobao, Tmall, 1688, and other Chinese marketplaces. However, after the emergence of Pinduoduo and Temu, logistics operators reported a sharp increase in packages arriving from China. “When Temu just entered the Kazakh market, the growth in package volumes was much faster than anticipated. Hence, all Temu operators in Kazakhstan experienced queues, especially in the initial months. The number of packages handled by Kazpost increased rapidly. For example, it could handle 100 packages in one day, then 200, 300, and by the end of the week, one point could receive a thousand packages,” says Anel Abdirova, head of international business development at Kazpost.
Until recently, they were not registered in Kazakhstan and had not paid any taxes or duties. The Kazakh government managed to address the first issue. It was revealed that in February of this year, 101 online trading platforms, including Temu, Pinduoduo, and Alibaba Group, were registered for tax purposes. Regarding customs duties, these companies also do not pay them, as there is a duty-free import threshold in Kazakhstan. Currently, it stands at 500 euros and/or a weight limit of 25 kg. Thus, the vulnerability of domestic businesses against Chinese marketplaces remains a significant concern. It is still unclear whether Kazakhstan will adopt similar measures to those of Western countries.
Today’s business resembles a child who cannot wean off its mother’s breast
Developed countries have a multitude of mechanisms to protect their domestic markets. According to Kazakh entrepreneur Makhambet Asabaev, we lack the economic resources to make such decisions. We only fulfill 10% of the demand in our domestic market ourselves, while 90% is covered by imports. “In Turkey, exporters receive targeted concessional loans, full or partial refunds of taxes included in the cost of exported products, partial reimbursement of expenses for scientific developments, and credit holidays for newly launched productions. We find China’s experience interesting in terms of building business infrastructure. There, specific provinces and cities specialize in producing certain types of goods (fabrics, knitwear, hosiery, women's clothing, etc.).
To enhance product competitiveness and create an innovative foundation for industry development, provincial authorities assist in establishing business technoparks that include quality control centers, service, training, information, logistics centers, and automated design centers for samples, as well as research institutes studying the properties of fabrics and technologies, among others,” says Makhambet Asabaev.
He emphasizes that the market needs not fish, but a fishing rod. This will allow businesses to stabilize and develop. The current business environment is not yet battle-hardened and resembles a child that cannot detach from its mother’s breast. If given the opportunity to toughen up, the domestic market will find its second wind.