(DailyChive.com) – American consumers shopping on Chinese e-commerce platforms like Temu and Shein will see lower import tariffs in a new trade deal, but will still pay significantly more than in the duty-free days of 2024.
At a Glance
- The US will reduce tariffs on low-value Chinese imports from 120% to 54%, effective May 14, 2025
- A flat $100 fee will remain in place for Chinese parcels valued under $800
- The reduction follows a broader US-China trade truce aimed at easing tensions
- E-commerce platforms like Temu and Shein have been forced to adapt their business models
- Critics had long argued the previous “de minimis” exemption enabled smuggling and unfair competition
Tariff Cuts After Months of Trade Tensions
The White House announced Monday that the “de minimis” tariff rate on low-value parcels from China will decrease to 54% from the previous 120% following a weekend agreement with Beijing. The change represents a significant shift in US trade policy toward Chinese e-commerce imports, which had been duty-free for items valued under $800 until earlier this year. President Trump eliminated that exemption in February by imposing a 120% tax or $100 flat fee on these shipments, effectively closing what his administration viewed as a dangerous loophole in America’s trade defenses.
The new 54% tariff, taking effect May 14, maintains the $100 flat fee established in the previous order. This modification comes as part of a broader trade truce between the world’s two largest economies, with both nations agreeing to dial back tariffs implemented since April. The US will also reduce its maximum tariff rate on Chinese imports from 145% to 30% for 90 days, including a 10% baseline levy and a 20% fentanyl-specific levy.
Trump Slashes ‘De Minimis’ Tariffs on Small Shipments From China—U.S. cuts tax to 54% from 120%, marking another trade de-escalation@ivy_jiahuihuang https://t.co/yYtZ0H9AKEhttps://t.co/yYtZ0H9AKE
— Jonathan Cheng (@JChengWSJ) May 13, 2025
Closing the “De Minimis” Loophole
The de minimis rule, established in 1938, had allowed packages valued under $800 to enter the United States without duties or formal customs procedures. Critics argued this exemption created an unfair advantage for Chinese retailers and enabled potential smuggling. The provision saw massive exploitation in recent years, with over 90% of packages entering the US under this channel, and approximately 60% of those shipments originating from China, according to official figures.
“Mr. Trump alleged in an April 2 executive order that shippers in China had been exploiting the loophole to ‘hide illicit substances and conceal the true contents of shipments sent to the United States through deceptive shipping practices.'” – Mr. Trump.
The administration’s original crackdown in February had dramatic effects, with tariffs as high as 145% applied to packages from China worth $800 or less as of May 2. The action was designed to level the playing field for American businesses competing against low-cost Chinese imports and address security concerns about potentially dangerous or illegal goods entering the country through this channel.
Impact on E-Commerce Giants and Consumers
The end of the de minimis exemption has significantly disrupted the business models of major Chinese e-commerce platforms operating in the American market. Temu, which had built its business on direct-to-consumer shipments from China, has been forced to completely overhaul its supply chain approach. The company has stopped direct shipments from China to the US and transitioned to a domestic fulfillment model to avoid the tariffs.
“Temu’s pricing for U.S. consumers remains unchanged as the platform transitions to a local fulfillment model. All sales in the U.S. are now handled by locally based sellers, with orders fulfilled from within the country,” the company said in a statement to CBS MoneyWatch last week. – Temu.
Shein, another major Chinese fast-fashion retailer, has also faced challenges adapting to the new tariff environment. The reduction to 54% may provide some relief compared to the previous 120% rate, but both companies must continue adapting their operations to remain competitive in the US market. For American consumers who had grown accustomed to ultra-low prices on these platforms, the new tariff structure still represents a significant change from the duty-free shopping experience they enjoyed earlier this year.
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