【By Observer Net, Qi Qian】
On August 29 local time, the U.S. duty-free policy for small packages (valued below $800) officially ended.
According to Reuters, the Trump administration initially targeted Chinese e-commerce platforms such as Shein and Temu with this move, which was later expanded to all small packages from any country. The report suggests that this has increased costs for e-commerce companies, small businesses using online marketplaces, and consumers, and disrupted supply chain models.
The South China Morning Post mentioned that many Chinese merchants said they expected shipping costs to the U.S. to increase, but they had already established warehouses in the U.S. in advance to buffer the impact. A professor at Cornell University in the U.S. said that the risk of this policy for Chinese e-commerce might be limited, as Chinese e-commerce giants are highly resilient and likely to quickly adapt to the new trade environment.
The U.S. ends "small exemption" for all countries
The report stated that the U.S. Customs and Border Protection (CBP) began charging regular tax rates on all imported packages globally starting at 12:01 a.m. local time on the 29th, regardless of value, origin country, or mode of transport. The agency provided a six-month transition period during which postal carriers could choose to pay a fixed fee of $80 to $200 per package based on the country of origin.
Data shows that over 1 billion small packages entered the U.S. last year. Screenshot from video
Foreign postal services can choose to collect and process tariffs based on the value of the package content, or select a fixed rate method by paying a fixed tax based on the "reciprocal" tariff rates set by the Trump administration for goods from the country of origin.
According to the guidance document released by CBP on the 28th, the fixed fee for packages from countries such as the UK and EU, where the Trump administration has set tariff rates below 16%, is $80; for countries such as Indonesia and Vietnam, where the tariff rate is between 16% and 25%, the fixed fee is $160; and for countries such as Brazil, India, and Canada, where the tariff rate exceeds 25%, the fixed fee is $200.
U.S. customs officials said that by February 28, 2026, postal services from all countries must fully switch to collecting "ad valorem taxes" (taxes based on the value of the product).
It is reported that in the 1930s, the U.S. Congress set an exemption for small packages to reduce the hassle for American tourists bringing souvenirs home from abroad. In 2016, the U.S. Congress raised the minimum amount for small exemptions from $200 to $800.
Americans love shopping on Temu and Shein. Data shows that the number of packages entering the U.S. through the "small exemption" has rapidly increased in recent years, rising from about 140 million ten years ago to over 1 billion last year. A previous report by the U.S. Congress indicated that Chinese small package exports will surge from $5.3 billion in 2018 to $66 billion in 2023.
In recent years, the number of small packages entering the U.S. through the "small exemption" has sharply increased. Reuters map
The U.S. insists on its own way: no country is exempt
After Trump took office, he instigated trade wars around the world, and Americans who relied on relatively cheap Chinese products were severely affected.
Previously, Trump announced tariffs of 145% on goods imported from China, and the "small exemption" policy expired on May 2nd. According to a White House executive order and industry experts, the tariff on small packages from China, which had been reduced from 120% to 54%, was again lowered to 30%.
At the same time, American youth have become increasingly dissatisfied with the Trump administration. According to a Bloomberg report in May, Trump's insistence on a trade war with China, targeting Chinese e-commerce platforms such as Shein and Temu and TikTok, may disrupt the lives of American youths who have grown accustomed to fast fashion, TikTok videos, and Xbox, further affecting these young consumers who have just become economically independent and are already under inflation pressure.
"Frustrated," "unaffordable," "don't know what to do"—many young people complain that the tariff policies have messed up their lives. Meanwhile, there have also been complaints within the Republican Party. The report states that Trump's heavy taxation may affect the upcoming midterm elections for the Republicans in Congress next year.
Data shows that approximately 48% of small packages were sent to the poorest areas in the U.S., while only 22% were sent to the wealthiest areas.
Starting on August 29 local time, the Trump administration's tariff on small packages from China was expanded to all countries. A senior U.S. government official said, "This is a permanent change," and added that any efforts to restore exemptions for reliable trading partner countries would "end in failure."
White House trade advisor Navarro claimed on the 28th that this move "will limit the influx of drugs and other dangerous contraband, save thousands of American lives, and generate up to $10 billion in tariff revenue for the treasury annually." The National Council of Textile Organizations also praised the move as a "historic victory" for American manufacturing, which could save American jobs.
However, American retail analysts said that the end of the "small exemption" is likely to increase the prices of many goods sold by e-commerce companies.
Some U.S. officials admitted that some foreign postal services have suspended mail to the U.S. According to a recent statement from the Universal Postal Union, as of the 26th, 25 countries' postal services have suspended outbound services to the U.S., citing the uncertainty of the new U.S. regulations.
"I think this process will have some growing pains, but it's the U.S. law," said Kelly Ann Schaefer, a former senior trade official in the first term of the Trump administration. "CBP needs some time to figure out how to handle these packages, which they haven't done for years."
"Chinese merchants are well-prepared"
According to the latest data from the Chinese customs, the value of small packages exported from China to the U.S. in July fell by 43% to $1 billion. However, according to analysis cited by the South China Morning Post, many Chinese merchants had already established warehouses in the U.S. in advance to buffer the impact when the exemption ended.
Over the past two years, Guangzhou merchant Henry Sun has sold towels and toothbrushes on the TikTok Shop platform in the U.S. He said he had prepared for this change and started looking for warehouses in the U.S. last year.
"We stopped sending small packages last year and switched to bulk shipping," Henry said. "This naturally increased the cost, so we gradually raised prices by 20% to 30%, and consumers have adapted to the higher prices." He added that his store's sales have been steadily increasing over the past three months, but he has become more cautious in his operations due to the uncertain trade environment, now avoiding large shipments.
Ricky Luo, a 31-year-old seller from Guangxi, took similar measures last year. He said, "At that time, we felt the pressure, especially knowing that Trump was likely to return and bring a new wave of tariffs. At that time, we had already started looking for warehouses in the U.S... Now we have accumulated a large inventory, with the total daily value of goods exceeding $20,000."
A Shenzhen merchant who has been engaged in cross-border e-commerce since 2018 said that the U.S. new rules indeed caused a significant impact on his business. Since May, the price of his shop has increased by 40% to 60%, and the average sales have decreased by about 20%. He said that unlike large merchants, small businesses cannot afford the cost of overseas warehouses, so he decided to find another way and recently started selling on Amazon, fulfilling orders through Temu and delivering them to customers.
Professor Li Chen from Cornell University in the U.S. said that Chinese e-commerce giants are likely to quickly adapt to the new trade environment.
"I don't expect trade disruptions," Li Chen said. "The small exemption is just an extra for companies like Shein and Temu. Now, the extra is gone, but the silk is still there." He said that these large platforms have built flexible large-scale supply chains, which are already highly resilient. "Their unique supply chain advantages will help buffer the impact of future policy changes."
Li Chen further pointed out that although retail prices on the platforms may rise, they remain attractive to American shoppers. "The new prices are still very affordable compared to what American consumers can find elsewhere."
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Original: https://www.toutiao.com/article/7543991519427002923/
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