United States President Donald Trump’s government ended tax-free access for low-value shipments from China and Hong Kong on Friday, removing exemptions by Shein, Temu and other e-commerce companies, as well as Fentanil traffickers.
Items valued at up to $ 800 and sent from China through postal services are now subject to a 120% tax of the package amount or a fixed fee of $ 100 per package – a value that will increase to $ 200 in June. Shipping are preparing for greater chaos at airports.
Trump accuses China of unfair business practices and guilt for a fentanyl -related health crisis.
What is the exemption?
Until Friday, the US exempted standard customs procedures and tariffs on imported items less than $ 800 that are sent to individuals.
This is one of the most generous exemptions in the world: the European Union limit, for example, is 150 euros ($ 156).
The US has been using exemption since 1938 to reduce administrative charges. During the presidency of Barack Obama, the congress quadrupled the exemption of $ 200, facilitating an increase in the number of exempt packages entering the country.
Continues after advertising
Remittances that claim exemption have increased more than 600% in the last decade, reaching more than 1 billion items in the 2023 fiscal year, according to customs and border protection data.
Why is exemption controversial?
The controversies are largely concerned with US commercial imbalances and Fentanil – which is causing a national epidemic that killed nearly 75,000 people by 2023.
Last year, Reuters reporters found that they could easily import the main precursors to at least 3 million fentanyl tablets – with a potential market value of $ 3 million – at a cost of $ 3,607.18. The referrals erroneously labeled the packages such as electronics.
Continues after advertising
Legitimate products are also controversial as Trump scales their rhetoric against China, the country with which the US has the largest bilateral commercial deficit of $ 279 billion by 2023.
Great exemption beneficiaries include online retailers who send products mainly from China, such as Shein, Temu, owned by PDD Holdings, and AliExpress, from Alibaba.
Its growth led Amazon to start its own discount service, Haul, allowing traders to send accessories of $ 5 and other items directly from China using the exemption.
Continues after advertising
Shein refused to comment on possible changes in US politics. In 2023, the company requested a renovation “to create a level field of playing and transparent – where the rules are applied evenly and equally.” Fear, Aliexpress and Amazon did not respond to comments requests.
Politics critics also claim that it allows companies to escape tariffs on Chinese products and customs inspections according to a law that prohibits products manufactured with forced labor.
Non -GDP impact China
Last year, China exported US $ 240 billion in direct consumer goods that benefit from exemptions worldwide, representing 7% of their sales abroad and contributing 1.3% of Gross Domestic Product (GDP), according to Nomura estimates.
Continues after advertising
The brokerage provides that the elimination of exemption in the US will slow down Chinese export growth at 1.3 percentage point and 0.2 point GDP growth, with a significantly greater impact if Europe and Southeast Asia also remove their exemptions from customs tariffs.
China’s most exposed sectors include clothing, which represents 35%of the value of direct Chinese exports to the consumer, consumer electronics, with 22%, home decoration, with 17%, and beauty products, with 7%, evaluates Nomura.
