Recent adjustments to tariffs on Chinese imports offer some relief to shoppers in the United States, yet significant duties on inexpensive goods persist, affecting purchasing patterns at budget-friendly online platforms like Shein and Temu. The Trump administration recently reduced the tariff on ‘de minimis’ packages—valued at $800 or less—from 120% to 54% for postal service deliveries, and from 145% to 30% for those handled by commercial carriers. Additionally, a planned increase in the flat-fee option from $100 to $200 per postal item has been halted, as per an executive order effective from Wednesday.
These changes reflect a gradual improvement in the US-China trade relations, although a full return to pre-January conditions remains distant. Concurrently, China has temporarily reduced its tariffs on American goods to 10% for a 90-day period, whereas most US tariffs on Chinese products have been adjusted to 30% for the same duration. These new tariffs supplement the existing levies implemented before the second term of President Donald Trump.
Despite these tariff reductions, the economic burden remains significant for American consumers, particularly those with lower incomes who depend on affordable Chinese products. Shoppers now face longer delivery times and increased prices. The de minimis exemption previously enabled Chinese e-commerce giants to saturate the US market with low-cost goods, which many Americans depended on.
Following the initial imposition of these tariffs, chaos ensued as USPS temporarily ceased the delivery of parcels from China, and delivery times lengthened. The expiration of the exemption led to price hikes on platforms like Shein and Temu, causing customers to struggle with continued purchases.
In response to the expiration, Temu revamped its shipping model, redirecting American sales through US-based sellers, while maintaining that consumer pricing would stay consistent. The heightened tariffs on low-cost imports, the administration contends, are intended to curb the alleged smuggling of illicit substances like fentanyl. Nonetheless, criticism persists that the exemption disadvantages US businesses and exposes consumers to counterfeit or potentially unsafe products.
The tariff landscape has left shippers and consumers in a state of uncertainty, with the broader impact on major e-commerce businesses yet to be fully understood. Experts anticipate that Chinese e-commerce firms might resort to stockpiling goods in the US during this period of de-escalation, as they gear up for the holiday shopping season.
Shein and Temu are reportedly expanding their US warehouse capacities to expedite shipping. Shein began stockpiling and bulk shipping to American warehouses last year, and Temu has reportedly restructured its supply chain, urging suppliers to send items in bulk to US warehouses. However, some US buyers have reported issues with out-of-stock items or limited availability.
The imposition of higher prices on Chinese e-commerce sites is expected to disproportionately affect lower-income households. Research indicates that nearly half of de minimis packages are shipped to economically disadvantaged areas, highlighting the potential hardship for those already struggling financially.
