US ends duty-free treatment for Chinese low-value packages, creating uncertainty for Shein, Temu and logistics sector

The US government ended duty-free (de minimis) treatment for low-value shipments from China and Hong Kong on May 3, a move that impact cross-border e-commerce firms such as Shein and Temu, according to Reuters.

All shipments, regardless of value, are now subject to tariffs of up to 145%, ending the long-standing exemption for packages under $800. Postal shipments face a 120% tax or a flat $100 fee, which will increase to $200 in June. The US Customs and Border Protection (CBP) said it is prepared to enforce the new policy but has suspended a rule requiring formal customs entry for certain packages, easing short-term pressure on logistics providers. The policy aims to curb the flow of illicit goods, including fentanyl precursors, often shipped under the de minimis threshold. Carriers like FedEx, UPS, and DHL must now ensure duties are paid before goods leave China.Low-value shipments from China totaled $5.1 billion in 2024. Industry analysts warn that US-bound air cargo from China could drop by up to 75% this year. [Reuters]