According to White House executive orders and industry experts, the U.S. will cut “minimum” tariffs on low-value goods shipped from China, further reducing the potentially destructive trade war between the world’s two largest economies.
Orders issued late Monday eased China's big e-commerce players Shein and Temu and in a weekend deal between Beijing and Washington, most of the fees charged on each other's goods since early April.
Although their joint statement after their conversation in Geneva did not mention De Minimis' duties, the order signed by President Donald Trump said that taxes directly to the consumer post will be reduced from 120% to 54% from items worth up to $800 starting Wednesday. The alternative fixed fee for each postal package is still in effect, but is planned to increase to $200 on June 1.
There are different rules for packages processed by commercial delivery companies such as United Parcel Service, FedEx and DHL, which shipped millions of dollars and Temu packages before Trump ended his duty-free status on Chinese goods worth less than $800.
The tax rates on these packages are now defaulting to 145% of U.S. tariff rates for imports from U.S. are reduced by 30% from 145%.
The 30% interest rate reflects the Trump administration's decision to reduce China's “countdown” responsibilities from 145% to 10%, plus a 20% tax related to the U.S. fentanyl crisis.
The White House and the Office of the U.S. Trade Representative did not immediately respond to a request for clarification.
Trade Representative Jamieson Greer told CNBC Tuesday that a 10% global responsibility rate could be retained in place to help rebuild a U.S. manufacturing base.
Commercial shippers usually receive duties from sellers in China before shipment, but the U.S. Postal Service is not set up to handle tariff payments. Four sources told Reuters that most Temu and Shein shipments are handled by commercial carriers.
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Many consumer goods from China's commercial channels will still bear higher tariffs under previous trade litigation or departmental national security investigations. For example, under the U.S. Section 301 trade lawsuit, syringes and surgical gloves are subject to 100% tariffs.
If shipped by postal operators worth less than $800, they may only arrive in the U.S. at a $100 fee, or 12.5% effective, a delivery expert said.
In February, Trump terminated the minimum exemption and imposed different rules on parcels processed by postal services or commercial delivery companies – the blaming immunity was to enable Chinese e-commerce companies and traffickers of fentanyl and other illegal goods to provide large quantities of goods.
In recent years, the number of goods entering the United States through duty-free channels has exploded, with more than 90% reaching all packages through De Minimis. About 60% of this comes from China, led by direct consumer retailers such as Temu and Shein.
According to congressional testimony from U.S. Customs and Border Protection officials in 2024, the average value of De Minimis shipments in fiscal year 2023 is only $54.
Chinese online retailer Shein (that is considering listing in London), Temu owned by PDD Holdings, and U.S. rival Amazon did not immediately respond to requests for comment.
According to Nomura estimates, China exported $240 billion in direct-to-consumer goods that benefited globally last year, accounting for 7% of its overseas sales and 1.3% of GDP.
Jianlong Hu, CEO of Brands Factory, a Chinese cross-border e-commerce consulting firm, said tariffs remain high.
“Sellers may be taking a method to be seen, but overall, I think it’s arguably the golden age has disappeared from the small packaging boom from China to the United States.”
Shein is more affected by the smallest change than others like Temu because of her reliance on the speed of getting thousands of new styles per week.
Hu said Shein may still be a player who wants to ship freight by air, send some packages from China and pay a 54% tariff instead of importing by boat.
“If people buy clothes on Shein and are told that the product will arrive in a month, who will buy it?”
Chinese elements rose to six months high against the dollar on Tuesday after a broader trade deal between Beijing and Washington and joined the rally of global risk.
Trump's global trade war has weakened the script that has managed international trade for decades, shocking financial markets and increasing concerns about a recession.
The American rule dating back to 1938 was a target of increasing criticism by Democratic and Republican lawmakers because of loopholes that allow Chinese products to comply with U.S. tariffs, illegal drugs and fentanyl precursors, as confirmed by Reuters’ report.
