Following a 90-day agreement to mutually reduce tariff rates with China, the White House announced a significant adjustment to import duties on cheaper goods. This move directly impacts packages from China and Hong Kong valued under $800.
The new policy implements a tariff of 54 percent (down from a hefty 120 percent) or a flat $100 per-parcel fee – a change from previous plans to double the flat rate to $200. Importantly, businesses retain the choice between percentage-based or flat-rate taxation for their products.
This adjustment stems from efforts to counter the impact of the previous “de minimis” exemption, which allowed cheaper imports to evade tariffs. Initially, the Trump administration proposed a 30 percent rate and a $25 flat fee for de minimis goods. However, this was subsequently tripled and then further increased, leading to the current, albeit reduced, rates.
The implications for companies like Temu and Shein, which thrived on the previous tax-free shipping, are substantial. Even with the lowered tariffs, these businesses remain under pressure, having recently raised prices for US consumers in anticipation of increased costs.
The latest tariff adjustments, while lower than previous iterations, represent a continued shift in trade policy and the ongoing economic relationship between the US and China. The long-term effects on both consumers and businesses importing goods from China remain to be seen.
