In a significant move, the United States has revised its tariff policy on low-value packages from China. The adjustment, initiated by former President Donald Trump in 2023, saw the exemption threshold for these packages increase from $200 to $800. This change, part of a broader strategy to modify trade regulations, occurred amidst a surge in package entries from China—from 140 million to over 1 billion. The decision has stirred considerable activity and uncertainty within the US postal service and related agencies.
The re-examination of the de minimis exemption began even before Trump's tenure, with the threshold initially raised in 2016 to enhance trade facilitation. This adjustment allowed officials to concentrate on more significant shipments. However, Trump's 2023 policy shift aimed at increasing border taxes on Chinese goods by 10% on February 4, further modified the exemption for low-value packages. This strategic move was part of a larger initiative that included imposing and later suspending a 25% tariff on goods from Mexico and Canada to encourage ongoing trade discussions.
In a swift turn of events, the US postal service temporarily halted the acceptance of packages from China following Trump's abrupt order ending duty-free treatment for shipments under $800. The postal service reversed this decision a day later, resuming operations as Trump amended his directive. He clarified that tariff-free treatment would persist until "adequate systems are in place to fully and expediently process and collect tariff revenue."
The Biden administration has also weighed in on the matter, proposing in September to tighten regulations on packages from China. This proposal seeks to bolster US firms' competitiveness and address issues like the infiltration of illicit drugs via low-value shipments. As the number of these packages continues to rise rapidly, the administration believes that stricter measures could offer a solution.
Trump's introduction of "reciprocal tariffs" is set to commence next week. This plan involves imposing tariffs that match the rates other countries apply to equivalent US-made products. Such actions underscore a complex landscape of international trade relations, where policy shifts can create ripple effects across global markets.