The United States Postal Service (USPS) briefly announced a halt on package shipments from China and Hong Kong late Tuesday, only to reverse the decision by Wednesday morning. The agency clarified that it is working with Customs and Border Protection to implement a tariff collection system with minimal disruption to deliveries.
The confusion stems from a new executive order signed by former President Donald Trump on February 1, which imposes a 10% tariff on most Chinese imports and eliminates the long-standing de minimis exemption for low-value shipments under $800. This exemption has allowed companies such as Shein and Temu to bypass customs duties, selling goods directly to American consumers at lower prices.
While critics argue the exemption unfairly benefits Chinese e-commerce giants, supporters say it helps keep costs down for both consumers and small businesses. Removing the exemption could lead to price increases and supply chain disruptions, particularly for businesses that rely on drop shipping.
The de minimis provision, part of the Tariff Act of 1930, was originally designed to ease customs processing for low-value goods. Over time, its threshold was raised, most recently in 2016, when it jumped from $200 to $800. E-commerce expansion has led to an explosion of small-package shipments, particularly from China. The Congressional Research Service estimates that de minimis-eligible Chinese imports grew from $5.3 billion in 2018 to $66 billion in 2023, prompting bipartisan scrutiny.
In addition, the change could impact major retailers such as Amazon, which recently launched Haul, a budget-friendly marketplace to compete with Temu. Moreover, American businesses that use fulfillment centers in Canada and Mexico to save costs may face challenges if the exemption is removed for those countries as well.
Trump acknowledged that the new tariffs could lead to higher prices but argued they are necessary to rebalance U.S.-China trade. Some policymakers see this as part of a broader effort to reduce reliance on Chinese imports, while others warn that removing the de minimis exemption could create logistical bottlenecks, increase consumer costs, and disrupt small businesses reliant on low-cost imports.
Beyond economic concerns, some lawmakers argue that de minimis shipments allow illegal goods—including fentanyl and forced labor-produced items—to enter the U.S. unchecked due to lighter customs scrutiny.
Meanwhile, tariffs on Canada and Mexico—also included in Trump’s executive order—have been temporarily paused for a month following last-minute negotiations. If enacted, they would similarly remove de minimis treatment for imports from those countries, further complicating cross-border trade.
