USPS Halts All Packages From China, Sending the Ecommerce Industry Into Chaos

The United States Postal Service has suspended all package shipments from China and Hong Kong following President Donald Trump’s decision to eliminate the de minimis exemption, which previously allowed small packages under $800 to enter the U.S. without import duties. “The move could potentially create chaos and confusion across the online shopping industry, as well as make purchases more expensive for consumers, especially because many global manufacturers and internet sellers are located in China. Shoppers are now on the hook not only for the additional 10 percent tariff, but also whatever original tax rate their products were exempted from until Tuesday.” Cindy Allen, who has worked in international trade for over 30 years and is the CEO of the consulting firm Trade Force Multiplier, gave WIRED an example of how much additional cost the tariff will incur: A woman’s dress made of synthetic fiber shipped from China through de minimis will now be subject to a regular 16 percent tariff, a 7.5 percent Section 301 duty specifically for goods from China, the new 10 percent tariff required by Trump, additional processing fees and customs brokerage fees, and perhaps increased brokering and handling costs due to the sudden change in rules. “Will the dress that was $5 now cost $5.50 or $15?” says Allen. “That we don’t know. It depends on how those retailers react and change their business models.”

In the immediate term, clearing customs will become a challenge for most ecommerce companies. Their long-term concern, though, is the potential impact on profitability. The appeal of Temu and Shein and similar Chinese ecommerce companies is how affordable their products are. If that changes, the ecommerce landscape and consumer behavior in the US may change significantly as well. While the USPS has announced the suspension of accepting any parcels from China and Hong Kong, CBP hasn’t elaborated on how the agency will enforce Trump’s new tariffs other than saying in an announcement that it will reject de minimis exemption requests from China starting today.