Understanding Trump’s Ongoing Tariffs: Impact on China’s Cheapest Exports

Shoppers recently caught a break from some heavy tariffs on goods coming from China. But many Americans who rely on budget-friendly e-commerce sites like Shein and Temu still face higher costs and longer waits for items.

The Trump administration has lowered the tariff on “de minimis” packages—those valued at $800 or less—from 120% to 54%. For packages handled by commercial carriers, the rate dropped from 145% to 30%. This change comes after concerns over high fees that were set to increase in June.

This shift reflects the ongoing US-China trade war. While relations between the two countries are improving, they’re still not back to where they were before January. China has responded by reducing its tariffs on US goods to 10% for 90 days, while US tariffs on Chinese products have decreased to 30%.

Higher tariffs primarily impact consumers, especially those with lower incomes who depend on affordable goods from China. Trade experts warn that Americans may now face longer shipping times and higher prices.

Clark Packard, a trade policy researcher at the Cato Institute, notes, “This situation is better than the alternative, but it disrupts access to essential household items.” The decrease in tariffs on certain postal packages means that items shipped via USPS will be taxed less, while items from UPS and FedEx still face high tariffs, making it tough for both consumers and businesses.

Before the tariff changes, these high fees led to chaos. USPS even halted deliveries from China for a time, causing delays. After the fees rose, customers noticed price hikes on Shein and Temu, affecting their shopping habits.

Notably, Temu quickly revamped its shipping model to send US-based orders through local sellers, maintaining its pricing. However, uncertainty remains about how these changes will affect pricing in the long run.

Tariffs on cheap imports are still substantially higher than on other goods, partly due to concerns over illegal substances smuggled in these packages. Critics of the de minimis exemption claim it harms US businesses and exposes consumers to counterfeit products.

Confusion is rampant among shippers and buyers. Even with reduced rates, companies are hesitant to speculate on the future. Trade experts predict that Chinese e-commerce giants may stockpile goods in the US as they prepare for the busier holiday shopping season.

Companies like Shein and Temu are already working to increase their US inventory. Reports indicate that Shein has been stockpiling goods and bulk shipping to US warehouses. However, some customers have reported items being out of stock during this adjustment.

Moreover, lower-income households will likely bear the brunt of these price increases. Research indicates that about 48% of de minimis packages are sent to poorer neighborhoods, while just 22% reach wealthier areas. “This will hit those who are already struggling harder,” Packard adds.

As the situation develops, shoppers and sellers alike will need to adapt to the changing trade landscape.

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