New US Tariffs End Duty-Free Imports from China Impacting Retail Prices
The US government has ended the de minimis exception allowing duty-free imports of packages valued under $800 from China and Hong Kong. This change imposes tariffs of 30% or fixed fees on all such shipments, affecting billions of packages annually and prompting retailers like Shein and Temu to raise prices. The move escalates the ongoing US-China trade tensions with significant impacts on supply chains and consumer costs.
The United States government has officially ended the de minimis exception, a policy that previously allowed businesses to import low-value goods from China and Hong Kong without paying customs duties. This change took effect at 12:01 AM ET on May 2, 2025, following an executive order signed by former President Trump last month.
The de minimis exception had allowed shipments valued under $800, including electronics, toys, and clothing, to enter the US duty-free. This exemption was widely used by retailers such as Shein and Temu, enabling them to offer competitively low prices to consumers.
In 2024 alone, approximately 1.4 billion packages entering the US claimed exemption under this rule, highlighting its significant role in the retail and import sectors.
With the expiration of the de minimis exception, new tariffs will apply to all qualifying shipments. Postal carriers must now choose between applying a 30% fee on the value of each package or a fixed fee of $25 per package, which will increase to $50 starting June 1st. This change is expected to increase costs for importers and consumers alike.
The tariffs are part of a broader trade conflict between the US and China. Last month, the Trump administration imposed high tariffs on most Chinese goods, leading to a retaliatory 125% fee on US exports by China. This escalating trade war has already impacted pricing strategies and supply chains globally.
Retailers like Shein and Temu have responded by raising prices to offset the new tariffs, which could lead to higher costs for consumers and shifts in purchasing behavior. The removal of the de minimis exception marks a significant change in US import policy, with wide-reaching implications for e-commerce, logistics, and international trade.
Businesses reliant on low-cost imports from China must now reassess their supply chain strategies and pricing models to remain competitive. This development underscores the importance of staying informed about trade regulations and their direct impact on market dynamics.
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