By James Pomfret, Lisa Barrington and Casey Hall
HONG KONG/SEOUL/SHANGHAI (Reuters) -The U.S. Postal Service said it would temporarily suspend 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 duty-free to the U.S.
The Trump administration imposed an additional 10% tariff on Chinese goods that came into effect on Tuesday and moved to close the “de minimis” exemption that allows U.S. shoppers to avoid paying tariffs for shipments below $800.
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.
“This is huge… People waiting for orders from Amazon, Shein and Temu have no way of knowing when they can receive those orders,” said Ram Ben Tzion, founder of Ultra Information Solution, the firm behind digital shipment vetting platform Publican.
USPS said the change will not impact the flow of letters and ‘flats’ – mail that can be up to 15 inches (38 cm) long or 3/4 inches (1.9 cm) thick – from China and Hong Kong. It did not immediately comment on whether this was tied to Trump’s change to ending de minimis shipments from China and other countries.
“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 businessman 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.
China’s foreign ministry called on Wednesday for dialogue and consultation between Beijing and Washington, adding that reducing demand for drugs at home and enhancing law enforcement cooperation was the fundamental way for the U.S. to solve its fentanyl crisis.
GREATER SCRUTINY
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., 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.
FedEx, however, added it had suspended its money-back guarantee for U.S. inbound shipments effective Jan. 29, citing recent regulatory changes, according to a notice on its website.
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.
Shein and Temu did not immediately reply to a request for comment.
“Doing the paperwork for customs declarations was not something these companies had to deal with very often before,” said Basile Ricard, operations director at Ceva Logistics Greater China.
“So this is a very new process for them. If this remains a largely manual process it will be incredibly difficult… It’s really not clear for us at this stage how they are going to manage that.”
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. Amazon did not immediately respond to a request for comment.
In November, the U.S. company set up Amazon Haul to allow shoppers to purchase $5 handbags and $10 sweaters from China-based sellers.
DELAYS IN DELIVERIES
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.
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.
(Reporting by Chandni Shah in Bengaluru, Casey Hall, Brenda Goh in Shanghai, Lisa Barrington in Seoul, Lisa Baertlein in Los Angeles, Anne Marie Roantree, Clare Jim, James Pomfret, Jessie Pang in Hong Kong, Greg Bensinger in Washington; Writing by Miyoung Kim; Editing by Lincoln Feast, Shri Navaratnam and Saad Sayeed)
