The US Postal Service announced on Tuesday that it would temporarily suspend receipt of international parcels from China and Hong Kong.
The move comes after President Donald Trump shut a trade loophole this week that has been used to ship a massive number of low-value packages duty-free from China.
The Trump administration imposed an additional 10% tariff on Chinese goods that came into effect on Tuesday and moved to close the “de minimis” loophole that allows importers and US shoppers to avoid paying tariffs for packages worth less than $800.
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USPS said the change would not impact the flow of letters and “flats” 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.
Fast-fashion retailer Shein and online dollar-store Temu, both of which sell products ranging from toys to smartphones, have grown rapidly in the US 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 US 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.
US Customs and Border Protection said the number of parcels flooding into the US and using the de minimis exemption ballooned dramatically over the past decade, from 139 million in 2015 to 1.36 billion last year.
Shein and Temu did not immediately reply to a request for comment.
USPS rejig ‘will take time’
“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 US again,” said Chelsey Tam, senior equity analyst, Morningstar.
“This is a significant challenge for them because there were 4 million de minimis package per day in 2024, and it is difficult to check all the packages – so it will take time.”
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,” Niall van de Wouw, Chief Airfreight Officer at freight platform Xeneta, said.
“They will still be cheaper than buying through retailers in the US. 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 US warehouses and bringing more US sellers on board, to mitigate the impact.
But the vast majority of their products are still made in China.
Trump imposed the extra tariff on Chinese goods after repeatedly warning Beijing it was not doing enough to halt the flow of fentanyl, a dangerous synthetic opioid, into the US.
- Reuters with additional input and editing by Jim Pollard
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