US slashes ‘de minimis’ tariff on small China parcels to 54%

(Reuters)

HONG KONG/SHANGHAI May 13- The United States will cut the “de minimis” tariff for low-value items imported from China, a White House executive order said on Monday, further de-escalating a potentially damaging trade war between the world’s two largest economies.

The tariff relief, which affects big Chinese e-commerce players including Shein and Temu, follows a deal between Beijing and Washington to unwind most of the duties imposed on each other’s goods since early April, after weekend talks in Geneva.

While their joint statement, opens new tab in Geneva didn’t mention the de minimis duties, the White House order released later said the levies will be reduced to 54% from 120% for items valued at up to $800 sent from China via postal services, with a flat fee of $100 to remain, starting from May 14.

Carriers can pay either the 54% or the $100 fee per package, industry experts said. The logistics companies or freight forwarders collect those tariff fees from sellers in China in advance.

The de minimis exemption allowed items valued at up to $800 and sent from China via postal service to previously enter the United States duty free and with minimal inspections.

In February, President Donald Trump ended the de minimis exemption by imposing a tax of 120% of the package’s value or a planned flat fee of $200 – set to come into effect by June – blaming it for being heavily used by companies such as Shein, Temu and other e-commerce firms as well as traffickers of fentanyl and other illicit goods.

The number of shipments entering the U.S. through the tax-free channel exploded in recent years with more than 90% of all packages coming via de minimis. Of those, about 60% came from China, led by direct-to-consumer retailers such as Temu and Shein.

According to 2024 congressional testimony from a U.S. Customs and Border Protection official, the average value of a de minimis shipment during fiscal year 2023 was just $54.

Chinese online retailers Shein – which is considering a London stock market listing – PDD Holdings-owned (PDD.O), opens new tab Temu and U.S. rival Amazon (AMZN.O), opens new tab did not immediately respond to requests for comment.