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Changes to US tariffs on Chinese products could affect consumers more significantly than China itself.
The removal of the 'de minimis' exemption by President Trump may increase expenses for American consumers, particularly for those with lower incomes.
US President Donald Trump’s recent executive order, signed on February 1, abolishes a long-standing tariff exemption known as the 'de minimis' exemption, which permitted packages valued under US$800 to enter the US without incurring duties.
Analysts predict that this action, which increases tariffs on Chinese imports by an additional 10%, will significantly impact American consumers, especially those with lower incomes.
The exemption had been crucial for the expansion of China’s cross-border e-commerce sector, enabling small shipments from vendors like Shein and Temu to avoid import duties and customs inspections.
In the past decade, shipments entering the US under this exemption grew by over 600%, rising from around 139 million in 2015 to more than 1 billion in 2023, as reported by US Customs and Border Protection.
From 2018 to 2021, China was responsible for an estimated US$228.3 billion in de minimis shipments to the US, with over US$79 billion originating from Hong Kong, which comprised more than two-thirds of all de minimis imports.
This change means that goods from these cross-border e-commerce companies will now face tariffs that are already exceeding 20% in certain sectors, with the recent executive order imposing an additional 10% to those rates.
The elimination of the exemption may lead to higher costs for American consumers who have depended on affordable products from China, particularly in sectors with elevated tariff rates.
Nonetheless, Chinese firms are expected to face less severe repercussions, as these changes are likely to influence pricing and consumer demand in the US rather than their operations or capacity to sell goods internationally.
Analysts predict that this action, which increases tariffs on Chinese imports by an additional 10%, will significantly impact American consumers, especially those with lower incomes.
The exemption had been crucial for the expansion of China’s cross-border e-commerce sector, enabling small shipments from vendors like Shein and Temu to avoid import duties and customs inspections.
In the past decade, shipments entering the US under this exemption grew by over 600%, rising from around 139 million in 2015 to more than 1 billion in 2023, as reported by US Customs and Border Protection.
From 2018 to 2021, China was responsible for an estimated US$228.3 billion in de minimis shipments to the US, with over US$79 billion originating from Hong Kong, which comprised more than two-thirds of all de minimis imports.
This change means that goods from these cross-border e-commerce companies will now face tariffs that are already exceeding 20% in certain sectors, with the recent executive order imposing an additional 10% to those rates.
The elimination of the exemption may lead to higher costs for American consumers who have depended on affordable products from China, particularly in sectors with elevated tariff rates.
Nonetheless, Chinese firms are expected to face less severe repercussions, as these changes are likely to influence pricing and consumer demand in the US rather than their operations or capacity to sell goods internationally.
