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US ends duty-free treatment for Chinese low-value packages, creating uncertaintyfor Shein, Temu and logistics sector
On May 3, the US ended the de minimis duty-free treatment for low-value shipments from China and Hong Kong, now imposing tariffs of up to 145%. This affects e-commerce firms like Shein and Temu, potentially leading to a 75% decline in US-bound air cargo from China and creating uncertainty in the logistics sector.
Key points
- The US government removed duty-free treatment for packages valued under $800 from China and Hong Kong.
- All shipments are now subject to tariffs: up to 145% and postal shipments face a 120% tax or flat fees starting from $100.
- The policy aims to reduce illicit imports, notably fentanyl precursors.
- Carriers must ensure that duties are paid before shipments leave China.
- Analysts predict a potential 75% decrease in US-bound air cargo from China in 2023.
Why it matters
- This change reflects ongoing tensions between the US and China over trade policies.
- The move aligns with a wider trend post-COVID-19 to increase regulation on e-commerce imports.
- In 2025, many industries are expected to adapt to stricter trade regulations as part of increased national economic security strategies.
The termination of duty-free treatment for low-value shipments marks a significant shift in US trade policy, increasing operational costs for e-commerce companies while aiming to combat illicit trade, ultimately reshaping cross-border commerce dynamics.