USPS Halts all packages from China

The U.S. de minimis exception in light of the 2016-2017 presidential package tax cut and an executive order to close the loophole

The confusion comes after President Trump used an executive order imposing a 10 percent tariff on Chinese goods to also close a loophole called the de minimis exception, which allowed packages valued below $800 to enter the US duty free. e- commerce outfits like Temu and Shein can offer goods to US buyers at such low prices. It is also widely exploited by the likes of Amazon and by merchants on Etsy and eBay.

But that now stands to change, after President Trump signed an executive order stating de minimis treatment “shall not be available” for products made in China, the top source of goods imported to the U.S.

The United States has seen a dramatic increase in the number of de minimis shipped to it over the last decade.

Teresa Murray said that her group supports changes to the law when asked to comment on the U.S. shift.

According to the U.S International Trade Commission, de minimis is a Latin word which means ‘trifling or of little importance.’ It was enacted in the 1930s as a way to let people skip import fees for small-value shipments.

About 100 countries have de minimis exceptions, based on a wide range of monetary thresholds. When Barack Obama signed the bipartisan Trade Facilitation and Trade Enforcement act in 2016 the U.S. level was one of the highest in the world at $800. Across the European Union, the level is 150 euros (about $156).

Items imported under the exemption “are free of duty and taxes and are subject to expedited clearance processing,” the U.S. International Trade Commission notes.

The U.S. limit on de minimis isn’t enough: critics argue against the trump’s bang, with consequences for American consumer goods and toys

Backers of the existing de minimis structure say it eases commerce and gives consumers low prices; critics say it is used to hawk “cheap crap,” as one lawmaker put it, and gives foreign companies an unfair advantage over domestic retailers.

de minimis was being eyed for change before trump was sworn in. The Biden administration proposed a rule to close the loophole. The law is prone to being abused, from unscrupulous retailers misrepresenting prices to criminals shipping illegal drugs under the guise of innocuous goods.

The United States Postal Service has warned of “disruption to package delivery” from China and Hong Kong, after briefly suspending all inbound package shipments from the two countries. The suspension was announced yesterday but has already been rescinded, and USPS says it is “accepting all” parcels shipped from China again.

The Congressional Research Service (CRS) updated de minimis policies last week and Temu and Shein accounted for about 17% of the U.S. discount market in 2023 for items such as consumer goods and toys.

The Public Interest Research Group supports bipartisan legislation such as the Ensure Accountability in De Minimis Act, which would limit which shipments can benefit from de minimis rules.

According to Murray, restricting what qualifies for the de minimis exemption would help keep unsafe toys out of our homes. People in the United States would be safer because of this.

But she also said that lowering the U.S. limit on de minimis wouldn’t be enough to stop shipments of small packages that go directly from Temu and Shein to U.S. consumers without close inspection.

Master cartons and transshipments help to obscure the origin and contents of the products, according to the CBP.

The Impact of the USPS De minimis Expansion on China’s Large-Scale Logistics and Trade: The Case of Temu and Shein

They are one of the Chinese businesses that have shifted key parts of their structures outside of China. The report states that Temu’s company is tied to a British Virgin Islands-based holding company, while Shein is located in Singapore and isn’t selling goods in China.

“Compared to Temu, Shein relies more heavily on USPS for direct-to-consumer shipping from China, and without this channel, it will have to rely more on private carriers,” said Cooke.

The effort to curb the de minimis excemption seems like a longer term shift in policy since it is unclear how long the USPS suspension will last.

The Chinese Foreign Ministry urged the U.S. to stop using economic and trade issues as a tool, and to stop suppressing Chinese companies.

It will likely impact online shopping destinations like Shein and Temu, popular with younger shoppers in the U.S. for cheap clothing and other products, usually shipped directly from China.

The “de minimis” exemption that lets shipments go tax-free if their value is under $800 was a factor that helped these companies keep costs low.

“That will increase logistics costs, which along with the recent scrapping of the de minimis exemption for most products from China, could erode its price advantage.”

Daniel, the owner of a trucking company that does not use his full name, says that his trucks were turned away in New York and Montana because they contained packages originally from China. After speaking with a US Customs and Border Protection agent in Montana, the company was able to get a third truck into Washington state by removing all packages from China, Daniel says.

Many small parcels like DVD’s and toys, all coming from a variety of sources are difficult to identify from China and are the reason why it is difficult for him to separate them.

What’s going on at a US factory? A survey of CPRS employees in the UK, with an application to Shein and Temu

More than two-thirds of those who work for the United States Agency for International Development are stationed overseas, according to the US Congressional Research Service. The agency has more than 60 regional and country missions and represents less than 1 percent of the total US federal budget overall.

Are you employed at Shein, Temu or another company and knowledgeable about what is going on? We want to hear from you. Use a nonwork phone or computer to contact the reporter, and be sure to include your name, location and phone number.

“On a daily basis, US Customs will file and process about 100,000 entries,” says Bernie Hart, vice president of customs and trade management business development at Flexport, a US supply chain management company. Agents have to process a million more packages, verify the prices and what is in them.

In addition to enabling the likes of Shein and Temu, de minimis shipments have posed safety concerns, making it easier for low quality products to reach US buyers. There are hundreds of fires caused by faulty e-bike batteries in New York City due to manufacturers skirting safety regulations and avoiding product inspection by using de minimis.