A day after banning all incoming parcels from Hong Kong and China, the U.S. Postal Service is changing its mind.
After the U.S. put an additional 10% duty on Chinese goods and eliminated a customs provision that let small value items to enter the U.S. without paying tax, the post office said on Tuesday that it would no longer accept packages from China and Hong Kong.
On Wednesday, the Postal Service changed its route without providing an explanation. In order to prevent delivery delays, it stated that it will collaborate with Customs and Border Protection to establish a collection procedure for the increased China tariffs.
When The Associated Press pressed the post office Wednesday for more information on the reversal, it referred to the brief written statement.
Online retailers Shein and Temu, which are well-liked by younger Americans looking for inexpensive apparel and other goods that are typically shipped straight from China, could see severe problems as a result of the prohibition.
Both the de minimis exemption, which formerly let goods to go tax-free if their worth was less than $800, and the inexpensive, direct postal service aid these businesses in keeping expenses down.
Shipment delays and maybe higher rates for businesses that depend on rock-bottom pricing for massive sales would have resulted from the USPS suspension.
What exactly did the USPS announce?
The U.S. Postal Service announced on Wednesday that it would continue to accept all international inbound mail and packages from China and Hong Kong, one day after announcing in a notice that it would cease receiving inbound items from the Chinese and Hong Kong Posts until further notice.
The temporary prohibition did not apply to letters or flat mail that were up to 15 inches long or 3/4 inch thick.
Why did it happen?
Trump closed the de minimis customs exemption for China this week, which allowed importers and consumers to avoid paying charges on items under $800. The USPS did not provide an explanation for the suspension on Tuesday.
As part of an executive order to impose a 10% duty on Chinese goods, the exception was eliminated.
According to earlier reports, U.S. Customs and Border Protection handles more than 4 million de minimis imports on average every week.
Additionally, it did not immediately reply to requests for comment from The Associated Press on Wednesday and did not provide an explanation for its decision.
What s likely to happen next?
Analysts predict that consumers will likely notice price increases and even shipment delays from companies like Shein and Temu as a result of Trump’s proposed tariffs on Chinese goods.
The Congressional Research Service said last week that Chinese exports of low-value packages increased from $5.3 billion in 2018 to $66 billion in 2023. According to the survey, Shein and Temu, both owned by PDD Holdings of China, account for roughly 17% of the discount market in the United States for toys, fast fashion, and other consumer items.
The commerce gap has also been frequently exploited by Alibaba’s AliExpress. According to Neil Saunders, a managing director at the research firm GlobalData, some companies that sell on Shopify and other e-commerce sites, including Etsy, also send packages straight from China to customers. To better compete with Shein and Temu, which rely more on de minimis, Amazon does the same for a portion of the products sold through Amazon Haul, a low-cost online marketplace it started last year.
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Temu and Shein refrained from commenting on the USPS policy changes right away. Temu claims on its website that it also collaborates with private delivery firms like UPS and FedEx. Shein points out that FedEx and USPS also allow package returns.
The U.S. Census Bureau estimates that in 2023, the most recent year with full data, the U.S. imported around $427 billion worth of goods from China. The largest import category are consumer electronics, which include laptops, smartphones, and other tech equipment.
The Associated Press
