The U.S. Postal Service (USPS) is temporarily suspending incoming parcels from China and Hong Kong after President Donald Trump ended a trade provision this week used by retailers, including Temu and Shein, to ship low-value packages to the United States without paying tax.
The move that is likely to see Americans pay more for products from popular Chinese e-commerce platforms was announced Tuesday, coming after the U.S. imposed an additional 10% tariff on goods from China. Canada and Mexico managed to negotiate a month-long reprieve from the 25% tariffs threatened by Trump.
It will likely impact online shopping destinations like Shein and Temu, popular with younger shoppers in the U.S. for cheap clothing and other products, usually shipped directly from China.
Cheap, direct postal services help these companies keep costs low, as did the "de minimis" exemption that previously allowed shipments to go tax-free if their value is under $800. However, it has faced scrutiny due to a surge in shipments in recent years.
The U.S. Customs and Border Protection agency said last month that exemption shipments were worth over $1.36 billion in 2024, creating challenges for its enforcement of trade laws, health and safety requirements, intellectual property rights and consumer protection rules.
The extra tariff and the elimination of de minimis follow repeated warnings by Trump that Beijing was not doing enough to halt the flow of fentanyl, a dangerous synthetic opioid, into the U.S.
Reuters reported previously that Chinese suppliers use the duty-free provision to export chemical materials for fentanyl by disguising them as gadgets and other low-cost goods.
The temporary suspension by USPS is likely to delay shipments and could mean higher prices in the long term.
The U.S. Postal Service said in a notice that it would temporarily stop accepting inbound parcels from the China and Hong Kong Posts until further notice.
It said the change will not impact the flow of letters and "flats" – mail that can be up to 15 inches (38 centimeters) long or three-fourths inches (1.9 centimeters) thick. It did not immediately comment on whether this was tied to Trump's change to ending de minimis shipments from China and other countries.
Beijing responded with fury to the move, accusing the U.S. of "politicizing trade and economic issues and using them as tools."
Vowing to "take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies," Foreign Ministry spokesperson Lin Jian accused Washington of "unreasonable suppression."
Tuesday saw Beijing say it would impose levies on imports of U.S. energy, vehicles and equipment in a return salvo minutes after Trump's tariffs came into effect.
Beijing's moves hit roughly $20 billion worth of U.S. goods per year – roughly 12% of total American imports into China, according to calculations by Capital Economics.
But their impact is a far cry from U.S. tariffs announced over the weekend, which will affect some $450 billion worth of goods.
Trump had signaled earlier that the talks with Chinese President Xi Jinping could take place early this week, but addressing reporters at the White House Tuesday afternoon, he said he was in "no rush."
Although earlier it appeared that U.S. parcels could still be sent from Macau, by Wednesday evening, the semi-autonomous Chinese city's post office announced that its service was also suspended.
Other retailers, such as Amazon, might also be impacted.
The low-cost retailers took another hit Wednesday as the European Commission announced it would seek to impose new fees on e-commerce imports – the bulk of which come from China.
The measures are part of efforts to tackle a surge of "harmful" products into the bloc.
"In our view, the USPS would require some time to sort out how to execute the new taxes before allowing Chinese packages to arrive in the U.S. again," said Chelsey Tam, a senior equity analyst at Morningstar.
"This is a significant challenge for them because there were 4 million de minimis packages per day in 2024, and it is difficult to check all the packages – so it will take time."
At a Hong Kong post office, a businessperson who had come to check the status of a package he sent to the U.S. earlier expressed frustration after a staffer told him it wasn't possible to ascertain where his delivery might be now.
"This political war is affecting the local people, not just in Hong Kong but in other places too. It’s very disturbing for us," John Khan, who has run a trading business for nearly 30 years, told Reuters.
Logistics provider Easyship warned clients who regularly send sub-$800 shipments to the U.S. were likely to face much greater scrutiny and advised them to set up distribution centers within the U.S., and partner with a local warehouse or U.S. fulfillment center.
Some other international couriers including FedEx and SF Express, China's largest express delivery company, said they continue to send packages to the U.S.
Fast-fashion retailer Shein and online dollar store Temu, both of which sell products ranging from toys to smartphones, have grown rapidly in the U.S. thanks in part to the de minimis exemption.
The two firms together likely accounted for more than 30% of all packages shipped to the United States each day under the de minimis provision, the U.S. congressional committee on China said in a June 2023 report.
Nearly half of all packages shipped under de minimis come from China, according to the report.
Amazon also has a large seller base in China, with e-commerce consultancy Marketplace Pulse estimating in February that China-based sellers represent nearly half of the top 10,000 sellers on Amazon in the U.S.
In November, the U.S. company set up Amazon Haul to allow shoppers to purchase $5 handbags and $10 sweaters from China-based sellers.
Trump's crackdown on de minimis would make the products sold by the likes of Shein and Temu more expensive but is unlikely to dramatically impact shipment volumes, experts said.
"E-commerce volumes out of China grew 20%-30% last year, so it's going to take a sledgehammer to crack that level of consumer demand and I'm not sure de minimis alone is enough," said Niall van de Wouw, chief airfreight officer at freight platform Xeneta.
"They will still be cheaper than buying through retailers in the U.S. Delays in receiving the goods due to operational disruptions could have a bigger impact than price."
Shein has previously said it supports reform of the de minimis provision.
Both Temu, a subsidiary of Chinese e-commerce giant PDD Holdings, and Singapore-headquartered Shein, which plans to list in London this year, have taken measures such as sourcing more products from outside China, opening U.S. warehouses and bringing more U.S. sellers on board to mitigate the impact.
However, the vast majority of their products are still made in China.
In what would be another blow to the two China-founded e-commerce platforms, the U.S. is discussing whether to add Shein and Temu to the Department of Homeland Security's "forced labor" list, Semafor reported on Tuesday.
