Americans on the East Coast awoke to shipping chaos on Wednesday morning. The United States Postal Service was no longer accepting parcels from China and Hong Kong.
By the time those on the West Coast awoke, USPS said the suspension had been lifted.
The whiplash from the roughly 12-hour pause raised new questions about how exactly the world’s sprawling shipping apparatus would navigate two major changes: the implementation of President Donald Trump’s new tariffs against China and the end of a policy long used by Shein and Temu to avoid US import fees.
As the market reacted to the suspension in overnight trading, USPS said it was working to “implement an efficient collection mechanism for the new China tariffs to ensure the least disruption to package delivery.”
The challenge likely facing USPS and other shipping firms arises from the fact that, ordinarily, companies are the ones to pay any tariffs on the products they bring in from overseas, the cost of which often gets rolled into the final price for end consumers.
Small parcels (worth less than $800) were generally excluded from import fees under a policy known as the de minimis exemption — and that made it convenient for the US Postal Service to accept e-commerce shipments from its Chinese counterpart, the China Post, along with postcards, letters, and other traditional mail for direct delivery to American addresses.
Meanwhile, companies like Shein, Temu, and others quickly figured out they could bypass existing US tariffs by shipping directly from China to US customers, leading the de minimis exemption to be dubbed a loophole.
A congressional report said that over 60% of all de minimis shipments to the US in 2021 came from China and that Temu and Shein were “likely responsible” for roughly a third of these small shipments to the US in 2022.
By contrast, the report estimated that Gap paid some $700 million in import duties in 2022, and H&M paid $205 million, while Temu and Shein each paid $0.
Trump’s new tariff policy has largely closed that loophole. The policy now creates fresh uncertainties for businesses and consumers alike in a hyperconnected global marketplace.
For starters, the question of how to collect that fee in a direct-to-consumer transaction is not yet resolved, and it’s not yet clear how businesses and their customers will respond to any resulting cost increases.
Plus, if orders are routed through some other channel or carrier, it’s unclear how the change in parcel volumes could affect fulfillment prices or shipment times.
One company already adapting is Yun Express, a Chinese cross-border logistics company.
The company posted instructions for customers advising them of the new charges and requiring shippers to provide details about each package, including the item name, value, quantity, destination country code, and weight.
Yun Express also said it will begin charging a 30% prepayment for customs duties on shipments from China to the US, which will be adjusted and refunded based on actual fees imposed at the port of entry.
Global Data retail analyst Neil Saunders said in a note that there will likely continue to be strong demand for Chinese products, in spite of tariffs or other costs.
“While the era of frictionless e-commerce between the US and China is coming to an end, this does not signal the death of marketplaces like Shein and Temu,” he said. “Even if prices rise, both will remain comparatively cheap, which taps into the continued consumer desire for low prices.”
