The United States has reduced the tariff on small packages from China to 54%, ended the de minimis tax exemption policy, and maintained a fixed fee of $100 per package.

Taiwan • Business • 05/13 10:59
The United States has reduced the tariff on small packages from China to 54%, ended the de minimis tax exemption policy, and maintained a fixed fee of $100 per package.

On May 13, 2025, the White House announced that starting May 14, the tariff on small parcels valued at no more than $800 sent from mainland China and Hong Kong to the United States will be reduced from 120% to 54%. However, a fixed fee of $100 per parcel will still apply, and the planned increase to $200 per parcel in June has been canceled. This move ends the small parcel exemption policy that has been in place since 1938, aiming to tackle the misuse of the system for smuggling and dumping.

Key Updates

05/14 10:59

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Inflation pressure in the U.S. is easing, but the impact of tariffs has not yet been observed. Forecasters are warning of potential price increases in May or June.

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05/13 15:24

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05/13 10:59

The United States has reduced the tariff on small packages from China to 54%, ended the de minimis tax exemption policy, and maintained a fixed fee of $100 per package.

On May 13, 2025, the White House announced that starting May 14, the tariff on small parcels valued at no more than $800 sent from mainland China and Hong Kong to the United States will be reduced from 120% to 54%. However, a fixed fee of $100 per parcel will still apply, and the planned increase to $200 per parcel in June has been canceled. This move ends the small parcel exemption policy that has been in place since 1938, aiming to tackle the misuse of the system for smuggling and dumping.

05/13 10:59

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05/13 10:26

The temporary reduction of tariffs between the US and China has boosted exports, resulting in an 88.88% increase in Wan Hai Lines' profit in the first quarter of 2025 and the expansion of its routes.

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Due to the new US tariff policy, Samsung is increasing DRAM prices: DDR4 by 20% and DDR5 by 5%. Companies are stocking up in advance, boosting demand.

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Background on the Termination of the De Minimis Rule

The United States' de minimis rule dates back to 1938, originally intended to simplify customs procedures for low-value imported goods, allowing international parcels valued at no more than $800 to enter the U.S. duty-free with minimal inspection. This rule has been heavily utilized in recent years with the rise of cross-border e-commerce, especially by Chinese direct sales platforms like Temu and Shein, which sell large quantities of low-cost goods directly to U.S. consumers via postal and courier services.

According to U.S. Customs and Border Protection (CBP) data, over 90% of imported parcels enter the U.S. through the de minimis channel, with about 60% coming from China. This phenomenon has drawn widespread attention from bipartisan U.S. Congress members and domestic industries, criticizing the rule as a loophole for dumping cheap Chinese goods and smuggling illegal items like fentanyl.

Details of Tariff Adjustments and Fixed Fee Policy

According to an executive order issued by the White House on May 13, starting at 12:01 AM Eastern Time on May 14, 2025, parcels from mainland China and Hong Kong valued at no more than $800 will be subject to a 54% ad valorem tariff, replacing the 120% rate implemented since February. Meanwhile, the option of a $100 fixed fee per parcel remains available for logistics providers or customs brokers to choose.

In February 2025, then-U.S. President Trump announced the termination of the de minimis rule, imposing a 120% tariff or a $100 fixed fee per parcel starting May 2, with plans to further increase the fixed fee to $200 in June. The current executive order explicitly cancels this planned increase, maintaining the $100 standard.

According to industry sources, logistics providers and customs brokers can choose to pay a 54% tariff or a $100 fixed fee based on the parcel's value, with Chinese sellers prepaying the relevant taxes. This approach provides some flexibility within the system but also means that all low-value parcels will no longer enjoy duty-free treatment.

Policy Implementation Background and Trade Agreement Context

This tariff adjustment follows a 90-day trade ceasefire agreement reached between the U.S. and China in Geneva, Switzerland. Under the agreement, the U.S. will reduce overall tariffs on Chinese goods from 145% to 30%, while China will lower tariffs on U.S. goods from 125% to 10%. Although the joint statement did not explicitly mention tariffs on small parcels, the subsequent executive order from the White House includes them in the adjustment as part of broader trade de-escalation measures.

White House officials noted that considering industry structure and economic stability, the decision was made to shelve the originally planned $200 fixed fee scheme and temporarily maintain the $100 standard to avoid excessive impact on consumers and supply chains.

Target and Focus of the Policy

The primary target of this policy adjustment is Chinese cross-border e-commerce platforms, particularly direct sales retailers like Temu and Shein. These platforms have extensively exported goods to the U.S. in recent years through the de minimis rule, avoiding traditional customs and tax processes. According to 2024 U.S. Congressional hearing data, the average value of parcels imported through the de minimis rule in the 2023 fiscal year was only $54, indicating that the rule has been widely used for low-value goods trade.

Additionally, the policy addresses the issue of illegal goods smuggling. The U.S. government pointed out that the de minimis rule has been exploited by drug smugglers as a channel for fentanyl and its precursor chemicals to enter the U.S. Terminating duty-free treatment and strengthening inspections aim to close this loophole.

Industry Reaction and Implementation Outlook

As of now, major e-commerce platforms like Temu, Shein, and Amazon have not publicly commented on this policy change. According to cross-border e-commerce industry observers, although the 54% tariff is still high, it provides some room for adjustment compared to the previous 120% rate and the impending $200 fixed fee.

Logistics providers and customs brokers will need to adjust customs processes and fee structures according to the new regulations and coordinate tax prepayment mechanisms with Chinese sellers. U.S. Customs and Border Protection is expected to increase inspections of postal and courier parcels to ensure the new policy is implemented.

References

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