[Text/Observer Network Qi Qian] Reuters reported on May 14 that according to the White House executive order and industry experts, the tariff on small parcels from China (valued at less than $800) has been reduced again from 120% to 54%, and then to 30%. The report said that this will further ease trade tensions between the two largest economies in the world and provide some breathing room for Chinese e-commerce platforms such as Temu and Shein.

Previously, after weekend talks, the deadlock in US-China trade was "unfrozen," and both sides agreed to reduce the tax rate by 115% within 90 days.

The report noted that shortly after the joint statement of the Geneva economic and trade talks between China and the United States was released on the 12th, the White House website issued a statement late that night, announcing a significant reduction in tariffs on small parcels sent from Hong Kong and mainland China to the United States, from 120% to 54%. At the same time, it retained the ad valorem tariff of $100 per small mail item that took effect on May 2nd and revoked the planned increase in the ad valorem tariff to $200 on June 1st.

A responsible person from a cross-border e-commerce consulting company said that the 54% tariff is still quite high. This person also mentioned that due to the additional tariffs, small parcels often experience delays upon entry. "People buy clothes on Shein, but are told they won't arrive for a month. Who would buy them?"

However, the report mentioned that two express delivery experts revealed to Reuters that in fact, the current default tax rate for small parcels from China has been reduced to 30%, which is the same as the latest tax rate currently imposed by the US on Chinese goods. Both spoke on condition of anonymity for fear of retaliation.

The White House and the Office of the US Trade Representative did not immediately respond to requests for comment.

Recently, American consumers have been shopping and stocking up on Shein and Temu - US media

It is understood that in the 1930s, the US Congress set exemptions for small parcels to reduce the hassle of American tourists bringing souvenirs home from abroad. In 2016, the US Congress raised the minimum amount for duty-free small items from $200 to $800.

Americans are enthusiastic about shopping on Temu and Shein. Data shows that in recent years, the number of packages entering the US under the "small exemption" has rapidly increased, surging from about 140 million ten years ago to over 1 billion last year. A previous report from the US Congress showed that the export value of small parcels from China will soar from $5.3 billion in 2018 to $66 billion in 2023.

According to Nomura Securities estimates, benefiting from the "small exemption", last year China exported $240 billion worth of direct-to-consumer goods globally, accounting for 7% of its overseas sales.

However, after Trump came to power in January this year and initiated a global trade war, Americans who relied on relatively cheap Chinese products were severely affected. Previously, he announced a 145% tariff on imports from China, and the "small exemption" policy expired on May 2nd.

CNN and Bloomberg noticed that on April 25th, Temu and Shein raised prices for a large number of products, from lawn chairs to swimsuits, before the new tariffs took effect. Among them, Shein almost raised prices for all product categories on the platform, with some products seeing price increases of more than double. The price increase for kitchen paper towels was the highest, reaching 377%.

This means that even "cheap products" on Temu and Shein are no longer within reach for American consumers. Previously, regular customers of Temu and Shein said that in recent years, they have increasingly turned to these two websites because they felt that American-made products were unaffordable.

Data shows that approximately 48% of small parcels were sent to the poorest areas of the United States, while only 22% were sent to the wealthiest areas.

Previously, Shein raised prices for almost all products, with kitchen paper towels seeing an increase of 377% - Bloomberg chart

Reuters stated that Trump's global trade war tore apart the script that had dominated international trade for decades, shaking financial markets and sparking concerns about a US economic recession.

At the same time, young Americans are becoming increasingly dissatisfied with the Trump administration. According to a Bloomberg report on May 3rd, Trump's insistence on initiating a trade war against China, targeting Chinese e-commerce platforms such as Shein and Temu as well as TikTok, may disrupt the lives of American youth who have become accustomed to fast fashion, TikTok videos, and Xbox, and further impact these young consumers who have just achieved economic independence and are already under inflationary pressure.

"Furious," "Unaffordable," "Don't know what to do"... Many young people complained that the tariff policies made their lives chaotic. Meanwhile, discontent emerged within the Republican Party. The report said that Trump's heavy taxation might affect the Republican Party's congressional midterm elections next year.

From May 10th to 11th, high-level economic and trade talks between China and the United States were held in Geneva, Switzerland. Both sides agreed to reduce tariffs within 90 days, cutting the tax rate by 115%. This news quickly attracted high attention from the international community and the market, with widespread belief that this was an important step taken by the two largest economies in the world in resolving trade disputes.

"Clearly, (US President) Trump blinked first, compared to China, which did not make any major or significant changes to its policies," US economist Larry Summers pointed out during an interview with CNN on the 12th. "Sometimes, taking a step back can lead to vast horizons. When you make a mistake, the best course of action is usually to correct it and take a step back, even if it brings some embarrassment."

This article is an exclusive contribution from Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7504212894649680423/

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