The White House has once again cut tariffs on inexpensive Chinese products that are commonly found on platforms like Temu and Shein. This new reduction brings the tariffs down to 30%, compared to the previous maximum of 54% set by President Trump earlier this week.
The decreased tariff, which falls from 145% to 30%, includes a 10% “mutual” duty on China along with a 20% tax related to fentanyl trafficking issues. There’s also a flat fee of $100 per package that remains in effect.
After trade discussions in Switzerland over the weekend, the US and China settled on a 90-day truce, resulting in the US slashing taxes on Chinese imports significantly while China dropped its tariffs on US goods.
This week, Trump initially reduced the “de minimis” tariffs on small packages from 120% to 54%, but sources indicated that the limit has since been further lowered to 30% as of Wednesday.
The White House has yet to respond to requests for comment on these changes.
Earlier this year, Trump ended the De Minimis exemption, which previously allowed platforms like Temu and Shein to send packages worth under $800 without US taxes.
However, as reported by Reuters, there are still different rules for packages sent via commercial carriers like United Parcel Service, FedEx, and DHL.
Despite these reductions, many Chinese imports continue to face significantly higher tariffs due to past trade actions or national security inquiries. For instance, syringes and surgical gloves are subject to tariffs of 100% under earlier trade measures. Interestingly, if these items are shipped in smaller quantities below $800, they can qualify for the De Minimis provision and only pay the flat rate of $100.
The De Minimis exemption has faced pushback from lawmakers on both sides, who argue that it allows dangerous products to bypass random customs checks.
Trump aims to create trade rules that facilitate the flow of goods like fentanyl into the US while also encouraging growth for Chinese e-commerce sites.
Last year, China exported around $240 billion worth of goods that benefited from this exemption, which Nomura suggests accounts for about 7% of domestic sales and 1.3% of gross domestic product.
Although De Minimis tariffs have been lowered, they remain steep for businesses that hadn’t previously paid duties on low-cost items.
Some sellers might adapt by changing their strategies, but it’s generally understood that the peak era for low-cost package deliveries from China to the US is likely over.
Temu and Shein have increased prices on their platforms and have delayed shipments of certain Chinese products to US customers since Trump closed that trade loophole earlier this year.
In recent weeks, many US shoppers seem to be turning away from these international platforms, opting instead for local clothing stores and other retailers.
Shein faces multiple changes, given its reliance on air deliveries for prompt shipping to US customers. To maintain their competitive edge, it seems they may consider paying the new taxes and continue air shipping from China.
After all, if customers are expected to wait a month for their clothing, who would really want to make that purchase?
