The United States Postal Service (USPS) has announced a significant shift in its operations by ceasing the acceptance of parcels from China. This decision comes in the wake of former President Trump’s executive order, which abolished an exemption that previously allowed goods valued at $800 (£641) or less to enter the U.S. without incurring duties or certain taxes.
Scrutiny of the de minimis tax loophole
This loophole, known as the “de minimis” tax exemption, has come under heightened scrutiny in recent years, particularly as Chinese e-commerce giants such as Shein and Temu have utilized it to tap into the bustling U.S. market, reaching millions of consumers. The recent changes are expected to have a profound impact on the flow of goods from China, which has been a significant contributor to the volume of parcels entering the U.S.
China’s response to U.S. tariffs
In retaliation, China has indicated plans to impose tariffs on select U.S. imports. Beginning February 10, coal and liquefied natural gas (LNG) will be subject to a 15% tax, while crude oil, agricultural machinery, and large-engine vehicles will incur a 10% levy. As trade tensions escalate, President Trump is anticipated to discuss these issues with Chinese President Xi Jinping in the coming days.
Trade expert Deborah Elms commented on the ramifications of these tariff changes, stating,
“Trump’s tariff changes are especially sharp if goods were previously shipped via e-commerce directly from China to the U.S.”
The U.S. Congressional committee on China reported that nearly half of all parcels entering the country under the de minimis exemption originated from China, emphasizing the importance of this decision.
U.S. officials have voiced concerns that the considerable volume of parcels coming into the nation through this exemption has complicated efforts to screen for potentially illegal goods. The USPS has been approached for further details regarding this operational change, which is expected to reshape the landscape of U.S.-China trade.