Let the Trade War Simmer, US Tweaks Rules Favorable to Chinese Online Retailers
Stricter US customs regulations creating challenges for retailers Temu and Shein
The tit-for-tat trade war between China and the US seems to be losing steam, with tariffs considerably decreasing. However, a specific regulation that has been causing a stir amongst Chinese online retailers like Temu and Shein remains steady.
After a temporary truce, Donald Trump continues to throw a spanner in the works for these online retailers. Earlier, the duty-free shipments policy exempted goods below $800 worth. But since early May, a duty of 120% has been charged - with a minimum charge of $100 per parcel, which will rise to $200 on June 1, as per President Trump's decree.
Cheaper Tariffs, Higher Goods Costs: A Twist for US Consumers
As US President Trump slashes tariff rates to 54%, the minimum charge of $100 stays put. This cause for concern may prompt online retailers to consider paying lower costs by moving goods to US warehouses and selling from there, given that the regular tariff for products from China has gone down to 30% as part of the Beijing agreement.
Traditional US retailers have long grumbled about the "de minimis" regulation for duty-free shipments under $800, citing it as an unfair advantage for Chinese competitors. Trump's latest move is justified by the assumption that it hinders the entry of hazardous substances like fentanyl into the country. Rising prices in US markets by Chinese online retailers such as Temu and Shein is a recent trend resulting from the loss of the duty-free exemption.
In support of the story:
- The impact of the new minimum duty per parcel rule, effective May 14, 2025, under the U.S.-China tariff truce, is significant for Chinese online retailers like Temu and Shein in the US market.
- The 120% tariffs on low-value packages (under $800) shipped from China through the US Postal Service have been reduced to 54%, making inexpensive packages more affordable [1].
- The minimum duty per parcel flat rate will stay at $100, capping tariff costs on smaller shipments, benefiting retailers like Temu and Shein that rely heavily on small parcel shipments [1].
- Packages shipped by commercial carriers are subject to the general tariff rate, which has also been lowered yet remains high (145%) [2]. This means shipments not via USPS could still result in substantial tariffs, yet the overall reduction in rates alleviates some pressure.
- The tariff reductions are part of a broader deal lowering general import taxes on Chinese goods from previously astronomical highs down to 30%, relieving tension in the trade conflict, thus aiding Chinese online merchants in maintaining competitive pricing in the US [1].
The Takeaway:
The new minimum duty per parcel rule and tariff reductions provide welcome relief from previous tariff burdens on low-value packages from China, lowering the import costs for Chinese online retailers like Temu and Shein operating in the US. This change in regulation reduces a significant barrier that made Chinese goods more expensive in the US market, making it easier for these retailers to keep prices competitive or even offer greater simplicity to customers [1][2].
Sources:1. ntv.de, jog/dpa2. Other sources optional, if desired
- The new minimum duty per parcel rule, effective from May 14, 2025, under the U.S.-China tariff truce, significantly impacts Chinese online retailers like Temu and Shein in the US market, as it provides relief from previous tariff burdens on low-value packages from China.
- The changing landscape of politics, business, and finance is evident in the recent adjustments to the employment policy for Chinese online retailers, as they navigate the complexities of the new minimum duty per parcel rule and the decreased tariffs on goods shipped from China.
