Part 4/11:
Simultaneously, China enacted new laws requiring e-commerce platforms to report all seller income directly to Beijing. This prompted a massive wave of Chinese sellers registering U.S. LLCs—an attempt to preserve their market foothold while exploiting the favorable legal environment of the U.S. marketplace. In just one year, U.S. LLC registrations surged by 400%, creating an influx of "American" sellers who are, in fact, Chinese operators.
The Illusion of Legitimacy
These Chinese companies establish American-sounding LLCs—like "John Smith LLC" registered in Delaware—complete with U.S. bank accounts, Amazon seller accounts, and professional branding. To the average buyer, they appear fully legitimate, even as the manufacturing, warehousing, and management remain in China.