Taxing Shein

In his book about India at reference 1, Wilson has a lot to say about the collection of tax on land and of tax on trade, this last often being called Customs Duties.

Duties which, incidentally, were a major source of revenue for governments here in the UK prior to the invention of things like income tax and VAT. This bit of information arising from my reading of Church last year, an accidental find at the Bugle (now closed) in Brading on the Isle of Wight. See reference 2.

Matters all stirred up by idle perusal of the piece at reference 3.

A ruler may see charging tax on goods leaving the country as a perfectly legitimate source of revenue. He and his country want a share of the possibly large amounts of money a trader might make by buying their goods at the prevailing market price, perhaps denominated in gold or silver. And then selling them on, somewhere else, for a massive profit.

A ruler may also see charging tax on goods entering the country as both a way to raise money and as a way to protect local industry, deemed to be important for one reason or another. He might, for example, want to keep our blast furnaces going, just in case we need to build battleships in time of war when imports might dry up. So he puts a whacking great tariff on steel.

The ruled might, however, take a short view, preferring cheap goods today to security for tomorrow. But that is not the issue at hand.

These days, welfare concerns are apt to added to the mix. Are the plants or animals being imported dangerous? What about food standards? What about cruelty to animals and/or people? Or women?

We now move from theory to collection, which is where things start to get messy and lawyers start to make lots of money.

In the olden days, the model was fairly simple. You had a seller who sent a parcel to a buyer. The parcel, going out or coming in through some port provided the unit of taxation.

But things were kept in proportion. Small parcels, moving around in the postal system were likely to be exempt. Although I remember from childhood, parcels from Canada arriving with large white Customs stickers on the outside, in essence, forms to be filled in by the sender, so there must have been some control. Perhaps a declaration that the parcel contained some old books, rather than a consignment of diamonds.

In the US part of the regulation of all this was something called Section 232 and another part something called Section 321.

Section 232 gave the President wide discretion to put punitive tariffs on imports which he deemed to be a challenge to national security. On which last, he or she had the first and last word.

Section 321 gave exporters exemptions from Customs (and other) duties on shipments worth less than $800.

With the arrival of computers and e-commerce, exporters and their lawyers had a fine old time devising wheezes to maximise the applicability of exemptions. Rulers, needless to say, hired their own lawyers, who, inter alia, made hay out of making the rules ever more complicated in an attempt to defeat the wheezes.

Most other countries, beside the US, play similar games, although with all the different tax regimes, the details vary quite a bit from country to country. Which is another dimension to the game.

It seems that Trump has cut through some of this by simply abolishing the Section 321 exemptions. On the other hand, he is making very extensive use of his Section 232 powers. See, for example, reference 4 for some chapter and verse.

Which bring us back to Shein, a more or less Chinese company whose hitherto very successful business model has been built on the back of these exemptions. Hence the piece at reference 3.

In the course of all this, Bing/Copilot were quite helpful, proving handy summaries of things like Section 232.

Gemini was even more helpful, with the opening of my discussion with him being snapped above. I suppose that there is plenty of stuff out there on the Internet about all this, lots of stuff for him to train on. And lots of money is involved: business will pay the likes of Google good money for good information - which will save them lots of time and effort from graduate trainees. Maybe even spot angles which they would likely miss.

I don't suppose he is word perfect and the lawyers will work hard to keep their jobs, but he is certainly a great help - certainly for my present purposes.

PS 1: the foregoing is a rather narrow view of the matter. No thought is given, for example, to the advantages of stable trading regimes or multinational agreements. Triangles of trade. Trade in services as well as trade in goods - the big tech companies being good at the first of these. Never mind Free Trade, which no doubt we here in the UK were very hot on in the days when we were good at manufactures and services hadn't been invented. Farmers outpriced by imports of grain from places like Canada could go hang.

Which reminds me that fishing is a smaller industry in this country than UCL is in London. Provided, that is, that we don't scare off all the foreigners. Facts which I have noticed before, but failed to check. Maybe tomorrow.

PS 2: at close of play today, the downstairs thermometer was reading 70°F, despite it seeming fairly cool. Must have adjusted to higher temperatures.

PS 3: Tuesday morning. A few seconds with Bing turns up reference 7 from which the snap above is taken.

And on the clue 'annual turnover uk fishing industry' Bing offered the snap above. So, on the face of it, my correspondent was understating it: UCL is near twice as big as fishing in terms of annual income. But that, needless to say, is not the whole story.

Furthermore, I wonder how much of that income is fees paid by students from East Asia. I dare say tht if I looked closely at reference 7, I would find out. Or are they a bit coy about that?

PS 4: from Sunday morning, from a rather affluent street not far from where we live. One might have thought that someone could spare a bucket of second hand water to help this young sapling along, but no. Someone else's problem. But I dare it will survive if we have some rain soon.

A zoom. Contrariwise, I have not watered the candytuft in our front verge; alive but not very happy. Maybe this morning. The  plant which arrived from I know not where, with the everlasting flowers.

References

Reference 1: India conquered: Britain’s Raj and the chaos of empire – Jon Wilson – 2016.

Reference 2: https://psmv5.blogspot.com/search?q=customs+revenue.

Reference 3: How Shein’s IPO lost its shine: Once high-flying fast-fashion retailer is listing in Hong Kong at quarter of peak value after years of false starts - William Langley, Arjun Neil Alim, Financial Times - 2026.

Reference 4: https://tariffwise.co/news/trump-tariffs-2026/.

Reference 5: https://www.odwlogistics.com/resources/suspension-of-section-321. More of same.

Reference 6: https://www.shein.co.uk/. The people themselves, at least their UK shop window.

Reference 7: https://www.ucl.ac.uk/about/sites/about/files/2026-02/UCL-Annual-Report-And-Accounts-2025-18feb26.pdf.