US Postal Service suspends incoming packages from China, Hong Kong

HONG KONG – The US Postal Service (USPS) said it would temporarily suspend parcels from China and Hong Kong, after US President Donald Trump ended a trade provision this week used by retailers, including Temu and Shein, to ship low-value packages duty-free to the US.

The Trump administration imposed an additional 10 per cent tariff on Chinese goods that came into effect on Feb 4 and moved to close the “de minimis” exemption that allowed importers and US shoppers to avoid paying tariffs for packages worth less than US$800 (S$1,080).

The extra tariff and the elimination of de minimis follow repeated warnings by Mr Trump that Beijing was not doing enough to halt the flow of fentanyl, a dangerous synthetic opioid, into the US.

Asked about the suspension at a regular news briefing on Feb 5, China’s foreign ministry said that “as a matter of principle... we urge the United States to stop politicising trade and economic issues and using them as tools, and to stop the unreasonable suppression of Chinese companies”.

Spokesman Lin Jian added that China would “continue to take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies”.

Reuters reported previously that Chinese suppliers use the duty-free provision to export chemical materials for fentanyl by disguising them as gadgets and other low-cost goods.

USPS said the change will not impact the flow of letters and ‘flats’ – mail that can be up to 38cm long or 1.9cm thick – from China and Hong Kong.

It did not immediately comment on whether this was tied to Mr Trump’s ending de minimis shipments from China and other countries.

“In our view, the USPS would require some time to sort out how to execute the new taxes before allowing Chinese packages to arrive in the US again,” said Ms Chelsey Tam, a senior equity analyst at Morningstar.

“This is a significant challenge for them because there were four million de minimis packages per day in 2024, and it is difficult to check all the packages – so it will take time.”

At a Hong Kong post office, a businessman who had come to check the status of a package he sent to the US earlier expressed frustration after a staff member told him it was not possible to ascertain where his delivery might be now.

“This political war is affecting the local people, not just in Hong Kong but in other places too. It’s very disturbing for us,” Mr John Khan, who has run a trading business for nearly 30 years, told Reuters.

Logistics provider Easyship warned that clients who regularly send sub-US$800 shipments to the US were likely to face much greater scrutiny and advised them to set up distribution centres within the US, or partner with a local warehouse or US fulfilment centre.

Some other international couriers, including FedEx and SF Express, China’s largest express delivery company, said they continue to send packages to the US.

Fast-fashion retailer Shein and online dollar-store Temu, both of which sell products ranging from toys to smartphones, have grown rapidly in the US thanks in part to the de minimis exemption.

The two companies together most likely accounted for more than 30 per cent of all packages shipped to the United States each day under the de minimis provision, the US congressional committee on China said in a June 2023 report.

Nearly half of all packages shipped under de minimis come from China, according to the report.

Shein and Temu did not immediately reply to a request for comment.

Amazon also has a large seller base in China, with e-commerce consultancy Marketplace Pulse estimating in February that China-based sellers represent nearly half of the top 10,000 sellers on Amazon in the US.

Amazon did not immediately respond to a request for comment.

In November, the US company set up Amazon Haul to allow shoppers to purchase US$5 handbags and US$10 sweaters from China-based sellers.

Delays in deliveries

Mr Trump’s crackdown on de minimis would make the products sold by the likes of Shein and Temu more expensive, but is unlikely to dramatically impact shipment volumes, experts said.

“E-commerce volumes out of China grew 20 to 30 per cent last year, so it’s going to take a sledgehammer to crack that level of consumer demand and I’m not sure de minimis alone is enough,” said Mr Niall van de Wouw, chief airfreight officer at freight platform Xeneta.

“They will still be cheaper than buying through retailers in the US. Delays in receiving the goods due to operational disruptions could have a bigger impact than price.”

Shein has previously said it supports reform of the de minimis provision.

Both Temu, a subsidiary of Chinese e-commerce giant PDD Holdings, and Singapore-headquartered Shein, which plans to list in London in 2025, have taken measures such as sourcing more products from outside China, opening US warehouses and bringing more US sellers on board, to mitigate the impact.

But the vast majority of their products are still made in China.

In what would be another blow to the two China-founded e-commerce platforms, the US is discussing whether to add Shein and Temu to the Department of Homeland Security’s ‘forced labour’ list, Semafor reported on Feb 4. REUTERS, AFP