News

In a major shift in trade policy, the White House has officially announced that beginning May 2, 2025, small packages valued at $800 or less originating from China or Hong Kong will no longer be exempt from import duties. This change marks a significant escalation in the ongoing U.S.-China trade tensions and could have sweeping effects on global e-commerce, particularly for platforms like Temu, Shein, and thousands of Chinese factories relying on cross-border parcel delivery.

What’s Changing?

Previously, the U.S. “de minimis” rule allowed parcels valued at $800 or less to enter the U.S. duty-free, as long as they were shipped directly to consumers. That loophole has been a lifeline for low-cost online retailers, enabling them to send millions of tax-free shipments daily.

But under the new presidential executive order:

  • All parcels from China and Hong Kong under $800 will now be subject to a 90% tariff on the declared value, or a flat $75 per parcel, whichever is higher.
  • This rule takes effect May 2, with a further increase scheduled for June 1, when the flat rate will rise from $50 to $150.
  • Carriers will be required to file formal customs declarations with the U.S. Customs and Border Protection (CBP).

Who’s Affected?

  1. Cross-Border E-commerce Platforms: Shein, Temu, AliExpress, and similar Chinese-based platforms that rely on the “small parcel” model will now face major cost increases, likely forcing them to raise prices or absorb losses.
  2. Chinese Manufacturers: Many small to mid-sized exporters who rely on drop-shipping or DTC (direct-to-consumer) business models may lose access to the U.S. market.
  3. American Consumers: Bargain-hunting shoppers accustomed to cheap fashion, gadgets, and home goods from China may soon feel the pinch.
  4. U.S. Logistics and Customs Brokers: More small parcels will now require customs clearance, adding complexity and paperwork to supply chains.

The Bigger Picture

This policy isn’t just about money—it’s about control and competition. As China shifts its focus from low-end manufacturing to high-tech dominance (think EVs, AI, and semiconductors), the U.S. is clearly moving to contain its rise by using tariffs as a strategic weapon.

And it’s not just about goods anymore. It’s about who controls supply chains, defines technology standards, and leads global commerce in the next decade.

What’s Next?

  • Expect Chinese retaliation. Beijing has already signaled countermeasures, possibly targeting U.S. agriculture, tech, and even financial services.
  • Importers in the U.S. will need to rethink sourcing strategies, possibly moving production to alternative countries or leveraging bonded warehouses and FTZs.
  • Consumers may see price increases and longer delivery times on many online orders.