Shein & Temu Under Donald Trump’s “De minimis” Exemption: How U.S. Customs and Trade Rulings Impact Chinese E-Commerce
“Shipping in bulk to the U.S. and fulfilling domestically can reduce logistics costs, but for Shein, this poses a longer-term disruption to their business model which has depended on rapidly developing new SKUs and shipping them directly to consumers,” Cooke said.
The effort to make the de minimis excemption more transparent seems like a shift in policy, as it is unclear how long the USPS suspension will last.
China has imposed a number of restrictions on US exports, along with taxes on fuel and large vehicles, in response to Trump’s tariffs. The country has also initiated antitrust proceedings against Google and Nvidia, with probes into Intel and Apple rumored to be in the works as well.
HONG KONG — Americans are likely to pay more for products from popular Chinese e-commerce platforms like Shein and Temu as the U.S. Postal Service said it would stop accepting parcels from China and Hong Kong.
The move was announced Tuesday, coming after the U.S. imposed an additional 10% tariff on Chinese goods and ended a customs exception that allowed small value parcels to enter the U.S. without paying tax. Canada and Mexico managed to negotiate a month-long reprieve from 25% tariffs threatened by U.S. President Donald Trump.
Cheap, direct postal service helps these companies keep costs low, as did the “de minimis” exemption that previously allowed shipments to go tax-free if their value is under $800.
The USPS did not state a reason in a brief announcement, but the suspension came after Trump closed the “de minimis” customs exemption this week that allowed shoppers and importers to avoid duties on packages worth below $800.
“That will increase logistics costs, which along with the recent scrapping of the de minimis exemption for most products from China, could erode its price advantage.”
The confusion comes after President Trump used an executive order imposing a 10 percent tariff on Chinese goods to also close a loophole called the de minimis exception, which allowed packages valued below $800 to enter the US duty free. It’s how Shein and Temu have been able to offer goods at low prices to US buyers. It has been exploited by a number of merchants on eBay, as well as by the likes of Amazon.
The challenge facing USPS and others is managing the task of inspecting the large volume of shipments from China that are suddenly eligible for duty and import taxes, which is almost certain to create delays and problems for packages from other destinations. Added costs are also likely thanks to the additional burden of inspecting and processing the parcels.
The number of parcels entering the US via the de minimis exemption has grown over the past 10 years, according to Customs and Border Protection. The shipment from China are no longer eligible for de minimis.
Low quality products can be reached in the US thanks to de minimis shipments, which pose safety concerns. In the extreme case, some e-bike and battery manufacturers have used de minimis to skirt safety regulations and avoid product inspection, contributing to hundreds of fires caused by faulty e-bike batteries in New York City alone.