- In a matter of hours, the USPS mentioned it had suspended after which resumed accepting parcels from China and Hong Kong.
- The pinnacle-spinning transfer comes because the service develops a method to accumulate tariffs on small packages.
- Parcels price lower than $800 had been beforehand exempt from tariffs, however Trump has ended that coverage.
Individuals on the East Coast awoke to transport chaos on Wednesday morning. The US Postal Service was not accepting parcels from China and Hong Kong.
By the point these on the West Coast awoke, USPS mentioned the suspension had been lifted.
The whiplash from the roughly 12-hour pause raised new questions on how precisely the world’s sprawling transport equipment would navigate two main modifications: the implementation of President Donald Trump’s new tariffs in opposition to China and the top of a coverage lengthy utilized by Shein and Temu to keep away from US import charges.
Because the market reacted to the suspension in in a single day buying and selling, USPS mentioned it was working to “implement an environment friendly assortment mechanism for the brand new China tariffs to make sure the least disruption to bundle supply.”
The problem seemingly going through USPS and different transport companies arises from the truth that, ordinarily, firms are those to pay any tariffs on the merchandise they create in from abroad, the price of which frequently will get rolled into the ultimate value for finish shoppers.
Small parcels (price lower than $800) had been typically excluded from import charges below a coverage referred to as the de minimis exemption — and that made it handy for the US Postal Service to just accept e-commerce shipments from its Chinese language counterpart, the China Submit, together with postcards, letters, and different conventional mail for direct supply to American addresses.
In the meantime, firms like Shein, Temu, and others shortly discovered they might bypass current US tariffs by transport immediately from China to US prospects, main the de minimis exemption to be dubbed a loophole.
A congressional report mentioned that over 60% of all de minimis shipments to the US in 2021 got here from China and that Temu and Shein had been “seemingly accountable” for roughly a 3rd of those small shipments to the US in 2022.
Against this, the report estimated that Hole paid some $700 million in import duties in 2022, and H&M paid $205 million, whereas Temu and Shein every paid $0.
Trump’s new tariff coverage has largely closed that loophole. The coverage now creates recent uncertainties for companies and shoppers alike in a hyperconnected international market.
For starters, the query of how you can accumulate that charge in a direct-to-consumer transaction will not be but resolved, and it isn’t but clear how companies and their prospects will reply to any ensuing price will increase.
Plus, if orders are routed via another channel or service, it is unclear how the change in parcel volumes may have an effect on achievement costs or cargo occasions.
One firm already adapting is Yun Categorical, a Chinese language cross-border logistics firm.
The corporate posted directions for patrons advising them of the brand new expenses and requiring shippers to supply particulars about every bundle, together with the merchandise title, worth, amount, vacation spot nation code, and weight.
Yun Categorical additionally mentioned it should start charging a 30% prepayment for customs duties on shipments from China to the US, which will likely be adjusted and refunded primarily based on precise charges imposed on the port of entry.
International Information retail analyst Neil Saunders mentioned in a observe that there’ll seemingly proceed to be robust demand for Chinese language merchandise, despite tariffs or different prices.
“Whereas the period of frictionless e-commerce between the US and China is coming to an finish, this doesn’t sign the demise of marketplaces like Shein and Temu,” he mentioned. “Even when costs rise, each will stay comparatively low-cost, which faucets into the continued shopper want for low costs.”
