The U.S. Postal Service (USPS) has resumed accepting parcels from mainland China and Hong Kong following a brief suspension prompted by new trade measures introduced by President Donald Trump. These changes, aimed at tightening import tax rules, have had a significant impact on cross-border e-commerce, especially with Chinese retailers like Shein and Temu benefitting from a tax exemption for small packages.
The USPS had initially halted shipments of parcels from China overnight but resumed processing on Wednesday after working closely with U.S. Customs and Border Protection (CBP) to ensure minimal disruptions in package deliveries. The brief interruption was in response to Trump’s new tariffs on Chinese goods, which also closed a loophole that had allowed small packages valued at $800 or less to enter the U.S. without paying taxes or fees.
This tax exemption, known as the “de minimis” rule, has been widely used by Chinese online retailers to ship low-cost items to U.S. customers, often circumventing import duties. The explosion of shipments under this rule, particularly from fast-fashion companies like Shein, has raised concerns among domestic retailers who argue that the exemption has given foreign companies an unfair competitive edge.
Nick Stowe, CEO of Monsoon Accessorize, voiced his support for the U.S. decision, noting that retailers in the U.K., Europe, and the U.S. have long criticized Shein for exploiting this loophole. “They have built a business at an industrial scale without paying customs duties,” Stowe told the BBC.
In response to the changes, DHL, a major shipping company, stated that it is working with clients to manage the new regulations and minimize disruptions to U.S. supply chains. Similarly, Shein announced it would comply with any new regulations and cooperate with the European Union (EU) to ensure consumer safety.
The EU is also grappling with similar concerns. It has moved to increase customs checks on goods sent directly from e-commerce retailers and is conducting an investigation into Shein for allegedly selling unsafe products. As of last year, 4.6 billion low-value items were imported into the EU, with 91% of those coming from China.
The changes in both the U.S. and EU have raised alarm over the growing flow of low-cost parcels and the challenge of screening them for illegal goods. Shein, which dominates the fast-fashion market in both regions, has been criticized for not paying taxes on products worth below the €150 threshold, a policy some argue gives them an unfair advantage.
Meanwhile, China has warned it will retaliate with its own tariffs, including measures targeting PVH Corp, the U.S. company behind brands like Calvin Klein and Tommy Hilfiger, accusing it of discriminatory actions against Chinese businesses.
As the U.S. Postal Service resumes processing shipments, officials are focused on minimizing disruptions while adhering to the new tax rules. The future of this evolving trade dispute, and the potential ripple effects on global commerce, remains uncertain.
