US Lowers Tariffs on Chinese Small Parcels from 120% to 54% Starting May 2025

The U.S. government has reduced tariffs on small parcels from China to 54% from the previous 120%, following a trade agreement with Beijing to ease tariffs for 90 days. This adjustment affects large Chinese e-commerce companies such as Shein and Temu, which had previously benefited from the de minimis exemption allowing imports valued under $800 to enter duty-free. The new tariff applies to packages sent via postal services, with a flat fee option of $100 per shipment remaining in place, though a planned increase to $200 was canceled. The de minimis exemption was eliminated due to concerns about its exploitation for evading scrutiny under laws like the Uyghur Forced Labor Prevention Act and its role in fentanyl trafficking. Despite the tariff reduction, the 54% rate remains a significant cost, leading companies like Temu to rely on U.S.-based warehouses to avoid higher fees, although this is a temporary measure. Retailers and industry experts suggest that the era of cheap, duty-free shipments from China is ending, signaling a shift in cross-border e-commerce dynamics.