Chinese exporters are significantly affected by the tariffs imposed by US President Trump, experiencing a 40% decline in low-value parcel exports to the US in May compared to the previous year. This decline is attributed to the Trump administration’s intention to impose 54% tariffs on lower-priced goods.
Chinese exporters are bearing the consequences of the extensive tariffs imposed by US President Donald Trump. The impact of these tariffs is considerable for the Chinese economy, particularly within the parcel sector. As per the latest customs data from China, published on Friday, exports of low-value parcels to the United States saw a decline of 40 percent in May compared to the previous year.
This data, released by China’s General Administration of Customs, has raised concerns in Beijing, as reported by Bloomberg. Currently, China’s export of small parcels to the US amounts to just over $1 billion, marking the lowest figure since early 2023. The 40 percent decrease from the same month last year signifies a stark reversal in the previously thriving trade between the two countries.
The Trump tariffs are also impacting the business strategies of fast-fashion giants like Shein and its competitor Temu, both of which depended on the exemption that allowed them to ship goods directly to US customers without incurring tariffs. Additionally, these tariffs are putting pressure on thousands of small merchants who relied on this model as a cost-effective means to enter the world’s largest consumer market.
“Without the exemption, it would mean tougher business for us, significantly fewer options for consumers, and potentially higher prices,” stated Wang Yuhao, whose incense company, Shantivale, based in Kunming, has recently started selling to the US, as reported by Bloomberg. “This is a lose-lose situation,” he further commented.
The end of the loophole
For entrepreneurs, the newly imposed tariffs and shipping fees for direct deliveries now translate to a loss of $2 on each parcel. Wang observed that to mitigate additional expenses, Chinese businesses have shifted to bulk shipping to US warehouses. However, this approach necessitates an initial investment exceeding 100,000 yuan ($13,800) for inventory and storage.
The disruption faced by the parcel industry stems from the elimination of the “de minimis” rule exemption for shipments from China and Hong Kong. Prior to the Trump tariffs, packages valued at under $800 could enter the US without incurring duties.
Nevertheless, starting from May 2, even those parcels are subjected to tariffs reaching as high as 54 percent. The Trump administration indicated that this action was implemented to eliminate the unfair loophole that Chinese companies had benefited from. According to Bloomberg, in the week following the implementation of the tariffs, both Shein and Temu experienced a decline in sales by double digits, which serves as an early indication that these punitive measures were diminishing their appeal.
Nonetheless, in spite of the decline, the United States continues to be the largest single destination for China’s small parcels, according to data released by Chinese authorities. Malaysia followed closely, importing over USD 700 million worth of such shipments last month. In the meantime, China’s small parcel shipments to the global market increased by 40 percent in May compared to the previous year, with Belgium, South Korea, Hong Kong, and Hungary being among other significant players.
