Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
Online shoppers in the U.S. will see a price break on their purchases valued at less than $800 and shipped from China after the Trump administration reached a truce with Beijing over sky-high tariffs.
An executive order Monday from President Donald Trump said the tariffs on low-value parcels originating from China and coming through the U.S. Postal Service will be lowered to 54%, down from 120%.
It also says a per-package flat rate—as an alternative to the value-based tariff—will be kept at $100, rather than being raised to $200 on June 1 as previously decreed. Packages shipped by commercial carriers are subject to the general tariff, which also has been cut.
The new rules go into effect Wednesday.
They are part of a broader agreement by the Trump administration to drastically lower import taxes on all Chinese goods from 145% to 30% following weekend talks in Switzerland with Chinese officials. China issued a public notice on Tuesday lowering its own tariffs on U.S. goods to 10%, down from 125%.
However, the reductions are temporary, allowing the two sides to negotiate a longer-term deal in the next 90 days.
Izzy Rosenzweig, founder and CEO of the logistic company Portless, said U.S. brands are “very excited” about the broader tariff cut. The import tax is still high, but not as prohibitive as when it was 145%, which amounted to a trade embargo.
On the low-value shipments, online purchases had been coming into the U.S. duty-free for several years under the de minimis rule, which exempted them from the import tax.
Popular shopping sites such as Shein and Temu that offer ultra-low prices took advantage of the duty-free rule by shipping directly from China to U.S. buyers, bypassing more cumbersome customs paperwork.
Shein has major operations in Indiana. In summer 2022, the company opened its Midwest distribution hub just northwest of Indianapolis—a 659,000-square-foot center in Whitestown—and announced plans for a second, 550,000-square-foot warehouse on its Boone County campus. At the time, Shein said it expected to boost employment at the site from about 750 to 1,400 by the end of 2025.
President Donald Trump terminated the exemption on such parcels originating from China and Hong Kong on May 2, following criticism that it not only resulted in lost tariff revenue but also allowed illicit drugs and unsafe products to flow into the U.S. without adequate scrutiny.
U.S. Customs and Border Protection said as many as 4 million low-value parcels were coming into the U.S. every day—many of which originated from China.
Shortly before the exemption ended on May 2, prices on many items sold by Shein rose. Temu apparently halted shipments from China and tapped its existing inventory in the U.S.
John Lash, group vice president of product strategy at the supply chain platform e2open, said he expected the volume of low-value packages would now rise but not back to previous levels. The $100 flat rate, he said, means that higher-value packages could get less of a hit, because the effective duty rate could be as low as 13%.
Neither Shein nor Temu immediately responded to requests for comment Tuesday about the lower tariffs.
Please enable JavaScript to view this content.
Can someone clarify this for me? Prior to this negotiation, tariffs for things under $800 were $0 – they were duty-free. Now it is reported that there will be a flat tariff of 30%, yet this article indicates for lower priced orders under $800 the tariff will be 54%? So if someone orders low cost items from China is it 54% or 30% tariff? And how is this winning when it was $0 before?