Tariff Exemption on Small Parcels Delayed as U.S. Agencies Struggle with Implementation
Washington, D.C. (February 2025) – President Donald Trump has temporarily halted tariffs on low-value packages from China, citing the need for federal agencies to establish efficient systems for processing and revenue collection. The move affects millions of daily shipments entering the U.S. via e-commerce platforms like Shein and Temu.
The executive order, signed on Wednesday, February 7, does not specify an end date. Instead, it states that tariffs will be reinstated once the Department of Commerce develops adequate systems to handle the surge in package processing.
Highlights of Trump’s Tariff Suspension:
- Tariff Collection Delayed: The tariff pause on Chinese small shipments will continue until Customs and Border Protection (CBP) and other agencies streamline tax collection.
- U.S. Postal Service Reverses Course: The U.S. Postal Service (USPS) initially stopped accepting packages from China and Hong Kong but later reversed its decision, pledging to work with CBP on a collection process.
- De Minimis Exemption Under Scrutiny: The policy, which allows duty-free imports on goods under $800, is being reconsidered amid concerns over tariff evasion, counterfeit goods, and illicit trade.
- Impact on U.S. E-Commerce: The suspension benefits consumers by preventing immediate price hikes but poses long-term trade and regulatory challenges.
- Massive Surge in Chinese Imports: In 2023, over 1 billion duty-free packages entered the U.S., compared to just 134 million in 2015, with China shipping $66 billion worth of small-value goods.
Economic & Trade Implications
The temporary suspension of tariffs on Chinese imports marks another major policy shift in Trump’s second term, following recent tariff adjustments on Mexico and Canada.
Trade analysts predict that e-commerce giants like Shein and Temu will adapt by increasing U.S. warehousing and switching to bulk shipping models. However, experts warn that removing the de minimis rule could lead to:
- Higher costs for online shoppers and small businesses
- Longer shipping times due to additional customs processing
- Stronger regulatory scrutiny on cross-border transactions
“The sheer volume of these shipments is overwhelming,” said John Lash, Group VP at e2open, a supply chain platform. “The shift from duty-free status to full tariff filings is a massive logistical challenge.”
U.S. Government’s Response & Next Steps
The Biden administration, trade groups, and consumer watchdogs are closely monitoring the impact of Trump’s executive order. Congressional leaders from both parties have long supported tighter restrictions on low-value imports to curb tariff loopholes and protect domestic industries.
As Washington debates the future of U.S.-China trade policies, businesses and consumers alike are bracing for potential supply chain disruptions and higher import costs in the months ahead.
