US Blocks International Packages from China…Temu and Shein Face the Impact

New Measures Disrupt E-Commerce Shipments from China to the US Amidst Trade Tensions / AFP

Amid escalating trade tensions between the United States and China, the US has implemented a new policy to block international packages coming from China, including Hong Kong, starting on February 4. This move is seen as the next phase of the trade conflict, following the announcement of additional tariffs by both nations. While the policy targets packages, letters and envelopes are excluded.

The US Postal Service (USPS) confirmed that it would temporarily suspend the entry of international parcels from China and Hong Kong into the United States, effective immediately and lasting until further notice. This measure was implemented shortly after the US introduced a 10% tariff increase on Chinese imports, with China responding with retaliatory tariffs. This trade war is viewed as an extension of the Trump administration’s efforts to close what they call the "loophole" in the system, which has allowed Chinese e-commerce platforms to take advantage of tariff exemptions.

For years, the US had allowed personal imports valued at under $800 to enter the country without incurring any tariffs, known as the de minimis exemption. This exemption has been a key factor in the expansion of Chinese e-commerce platforms like Temu and Shein, which offer low-cost products to US consumers. As of 2023, nearly 50% of imports under the $800 exemption came from China, with Temu and Shein accounting for a significant portion, approximately 30%.

The volume of items entering the US under this exemption has grown dramatically. Ten years ago, there were roughly 140 million packages annually entering the US under the $800 exemption, but in 2023, that number surpassed one billion. The increase reflects the growth in e-commerce, particularly from China, and the popularity of platforms like Temu and Shein.

In response to these new trade restrictions, logistics companies are advising their customers to adjust their operations. EasyShip, a logistics provider, has recommended that businesses relying on shipments under the $800 limit consider setting up US-based warehouses or utilizing local storage facilities. Temu and Shein are also taking proactive steps by expanding their supply chains outside of China and increasing their presence in the US, including securing US-based warehouses and partnering with local sellers.

Despite the potential for price increases due to the new restrictions, industry experts suggest that US consumers’ demand for Chinese goods will remain strong. According to Seneta, a logistics analysis firm, China’s e-commerce sector saw a growth of 20-30% last year, and while the new tariffs may cause some price hikes, they are unlikely to significantly reduce consumer interest in affordable Chinese products.

In conclusion, the US’ new policy to block international shipments from China marks a significant escalation in the ongoing trade conflict, which is likely to disrupt the operations of Chinese e-commerce giants like Temu and Shein. These companies are expected to adapt by strengthening their supply chains outside China and adjusting their logistics strategies to maintain their foothold in the competitive US market.