HONG KONG: The United States will cut the low value “de minimis” tariff on China shipments to 54 per cent from 120 per cent, modifying an earlier order imposed by Washington, a White House executive order said on Monday (May 12).
The tariff cut will start on Wednesday, with a flat fee of US$100 remaining.
The move comes several hours after Beijing and Washington announced a truce in their trade war, with both sides agreeing to unwind most of the tariffs imposed on each other’s goods since early April.
The de minimis exemption previously allowed items valued at up to US$800 and sent from China via postal services to enter the US duty free and with minimal inspections.
In February, President Donald Trump ended the exemption by imposing a tax of 120 per cent of the package’s value or a planned flat fee of US$200 – set to come into effect by June – after it was heavily used by companies such as Shein, Temu and other e-commerce firms as well as traffickers of fentanyl and other illicit goods.
The number of shipments entering the US through the tax-free channel exploded in recent years, with more than 90 per cent of all packages coming via de minimis. Of those, about 60 per cent came from China, led by direct-to-consumer retailers such as Temu and Shein.
Temu, Shein and Amazon did not immediately respond to requests for comment.
In Monday’s order, the White House said it was amending 120 per cent to 54 per cent with the changes to take effect by 12.01am (12.01pm, Singapore time) on May 14.
The plan for a US$200 flat fee duty rate would also be shelved, it said, keeping it at US$100.
The US de minimis rule, which dates back to 1938, has been the target of growing criticism from both Democratic and Republican lawmakers.
Some have derided it as a loophole that allows cheap Chinese products to flood into the US and undercut American industries, while also serving as cover for smuggling contraband such as illegal drugs and their precursor chemicals.
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