Published in News

Online shopping industry thrown into chaos over Trump tax

by on05 February 2025


Chinese small package shipments stopped

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 US without import duties. 

The move is creating chaos and confusion across the online shopping industry and making purchases more expensive for consumers, mainly because many global manufacturers and internet sellers are in China.

Shoppers are now responsible for the additional 10 per cent tariff and 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, told WIRED that a woman's dress made of synthetic fibre shipped from China through de minimis will now be subject to a regular 16 per cent tariff, a 7.5 per cent Section 301 duty specifically for goods from China, the new 10 per cent 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? That we don't know. It depends on how those retailers react and change their business models," Allen said.

In the immediate term, clearing customs will challenge most e-commerce companies. Their long-term concern, though, is the potential impact on profitability. The appeal of Temu and Shein and similar Chinese e-commerce companies is how affordable their products are. If that changes, the e-commerce landscape and consumer behaviour in the US may also change significantly.

While the USPS has announced the suspension of accepting parcels from China and Hong Kong, CBP hasn't elaborated on how the agency will enforce Trump's new tariffs other than announcing that it will reject de minimis exemption requests from China starting today.

Last modified on 05 February 2025
Rate this item
(0 votes)

Read more about: