Your Purchases in Temu and Shein Will Become More Expensive
After a brief scare yesterday, USPS lifted the world’s shortest delivery suspension , confirming it will continue to deliver packages from China and Hong Kong to the US.
The news follows a temporary halt in Chinese package delivery following President Trump’s executive order that applies a 10% tariff to Chinese goods and ends the de minimis exemption for shipments from China. USPS says it is currently working on a plan to implement these fees with “the least amount of disruption to package delivery” but will continue to accept affected packages in the meantime.
While other delivery services such as UPS or FedEx have not yet announced their response to the executive order, all will have to come up with some kind of plan. However, it looks like your grandparents abroad will still be able to send you care packages. But this does not mean that we are already out of the woods. While packages will continue to arrive, expect delays as shippers learn how to navigate the new tariffs as well as price increases.
While the 10% tariff is self-explanatory (goods from a country subject to tariffs will be imported at 10% higher prices), the loss of the de minimis exception is a little harder to understand and will likely be a major issue for China’s low-cost online marketplaces such as Shein and Temu.
Passed in 1930, the de minimis tax exemption was intended as a way for the United States to save itself some hassle by eliminating tariffs and charges on international shipping that would require more effort to collect than the government could get out of them. This generally applies to all packages under $800, which has been a boon for online e-commerce. Nearly half of all de minimis exceptions so far have been for Chinese parcels, with 30% of daily de minimis shipments coming from Tema and Shein, according to a 2023 US Congressional committee report cited by Reuters .
With this protection removed, designated stores will now be subject to customs duties on all goods in addition to the 10% tariff, which may result in increased prices and delivery times. American stores that rely on Chinese warehouses like Amazon Haul could also be affected.
It’s unclear at this point how much of this additional pain will be passed on to customers. Speaking to Reuters, warehouse management software ShipHero CEO Aaron Rubin said commissions are “probably about a 5 point difference in margin whether de minimis is used or not, and e-commerce businesses typically have 10-15% margins, so that’s a very significant impact.”
In contrast, Sheng Lu, a professor of fashion and apparel studies at the University of Delaware, told the publication that the new rules may only add a few cents to each item. However, while the price increase sounds modest, it could still have a major impact on small Chinese businesses that don’t have the resources to cover costs that Temu or Shein have.
Note that the de minimis exception has not been eliminated altogether—Trump’s new rules currently only target China (they also initially affected Canada and Mexico, but the president’s recent agreements with those countries gave them a 30-day suspension of enforcement). With that in mind, it’s possible that another country’s own version of Temu could dethrone the e-commerce giant, or that Chinese shippers could use a middleman to cut their fees a little.