By Didi Tang and Haleluya Hadero
WASHINGTON (AP) – President Donald Trump has suspended tariffs on small packages arriving from China.
The executive order on Wednesday did not say when the suspension would end, but “appropriate systems” to help the Commerce Department “completely and properly handle “the right systems” and collect tariff revenues.” He said it would be stopped when it was possible to install.
“It shows we’re moving fast. Many small packages have been affected,” John Rush, vice president of product strategies for supply chain platform E2Open, pointing to Trump’s order. Many are in transit.
“The volume is absolutely incredible,” Rush said. “And all of a sudden they don’t require filing (due to customs duties), so they actually require a full filing, which is a complicated task.”
The end of the tariff exemption from China on low-cost packages has received widespread bipartisan support in Washington, and Trump pulled the plug earlier this week when he raised tariffs on Chinese products by 10%. Items sent via tax-free packages were subject to not only existing tariffs, but also new 10% in many Chinese products.
It’s about Trump’s policies in weeks of his second administration, including an order to impose tariffs on Mexico and Canada, which were suspended after two allies took steps to appease concerns about border security and drug trafficking. I’ll pause more.
The US postal service announced on Tuesday that it would not accept parcels from mainland China and Hong Kong, as it would be burdensome to collect tariffs in small packages. It said it will work with customs and border protection to implement a collection process for the new tariffs.
“It’s one of those things that catch people who aren’t ready because you’ve gone into all the changes,” Rush said.
The so-called De Minimis exception, introduced in 1938, is intended to promote the flow of small packages worth less than $5, worth about $106 today. The threshold increased to $200 in 1994 and to $800 in 2016. However, the rapid rise in cross-border e-commerce pushed by China challenges the intent of customs exception rules decades ago.
China’s low-value package exports surged in 2023 from $5.3 billion in 2018 to $66 billion, according to a report released last week by Congressional Research Services. And the US market was a major destination.
For the first time in 2023, this package was delivered through US customs, with over 1 billion, up from 134 million in 2015. By the end of last year, customs and border protection said it was processing around 4 million cargoes a day. Eventually, they came from China through online retail platforms such as Shein and Temu.
Critics say the practice not only avoids tariffs, but also keeps unsafe products to US supporters, such as counterfeits and illegal drugs, keeping prices affordable for US consumers and small businesses. He said he claimed it would be useful.
After Trump abolished the exemption, some analysts said changes in policy could lead to higher prices and delivery delays as they deal with the onslaught of packages for US customs officials to scrutinize. I pointed it out.
“We’re talking about millions of packages that are now treated essentially like domestic shipping,” says Neil Saunders, managing director of research firm GlobalData.
He said Temu has already been adjusted by increasing warehouse capabilities in the US over the past year and shipping products in containers.
Lash said the end of the DE Minimis exception rule would change the cross-border e-commerce model if tariffs and document submissions increase costs, leading international sellers to resort to bulk shipping.
Hadero reported from South Bend, Indiana.
Original issue: February 7, 2025, 6:12pm EST
