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US President Donald Trump has temporarily paused measures to shut a tariff exemption on low-cost shipments from China while officials work out the best way to tax the tens of millions of packages that arrive within the US day-after-day.
In an amendment to an executive order signed on Wednesday and published on Friday, the White House said the so-called de minimis provision — which exempts shipments under $800 in value from tariffs and rigorous customs checks — would remain in place until “adequate systems are in place to totally and expediently process and collect tariff revenue”.
The de minimis provision was designed to assist households and small businesses purchase low-cost items from abroad without making them subject to onerous customs checks. In recent times, it has proved a boon to ecommerce platforms that ship on to consumers, resembling China’s Shein and Temu.
Trump last week cancelled the exemption in an executive order announcing an extra 10 per cent tariff on goods from China, which the White House said was geared toward punishing Beijing for allowing the flow of deadly opioid fentanyl into the US.
But had analysts warned that the choice, which got here into effect just days later, would force customs officials to use the more complicated formal entry process to each package arriving from China.
It might also make parcels formerly qualifying for de minimis subject not only to the extra 10 per cent tariff but in addition to existing trade levies, in keeping with experts.
The US Postal Service on Tuesday suspended receipt of packages from China, including Hong Kong, when the tariffs got here into effect, before backtracking sooner or later later to just accept shipments.
USPS said it was working with customs officials to ascertain an “efficient collection mechanism”, because the rapid implementation of the directive increased workloads for customs officials and stoked turmoil for exporters and freight carriers.
US officials have long had the de minimis rules of their sights. Domestic retailers that purchase items from overseas in bulk have complained that the exemption gave Chinese ecommerce groups an unfair cost advantage.
Former US president Joe Biden’s administration had proposed measures to tighten rules in regards to the de minimis regime.
The US Customs and Border Protection estimates that it processes greater than 4mn low-value shipments every day. A congressional select committee report in 2023 estimated that about 30 per cent of those packages got here from Temu and Shein.
The move to repeal the de minimis exemption hit Chinese ecommerce sellers this week, who said some logistics groups were charging withholding fees to cover the levies and other customs costs.
A report from analysts at Nomura, the Japanese investment bank, estimated that China shipped $46bn price of packages to the US under de minimis rules in 2024, and that scrapping the exemptions could knock 0.2 percentage points off Chinese economic growth in 2025.
Trump is anticipated to carry a call with Chinese leader Xi Jinping in the approaching days to avoid an escalation in trade tensions, with Chinese retaliatory tariffs on the US set to take effect on Monday. However the US president said on Tuesday that he was in “no rush” to confer with his Chinese counterpart.
