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PACKAGE DEAL

The US is cutting tariffs on small parcels from China from 120% to 54%

A new executive order slashes the “de minimis” levy by more than half amid the US-China trade truce.

Millie Giles

On Monday, just hours after the US and China released a joint statement announcing a 90-day pause in the ongoing trade war between the nations, a new executive order from the White House declared that the “de minimis” tariff, one of the major pressure points of the disputes, would also be slashed.

Starting from May 14, the US will more than halve the current import tax on small parcels from China to 54% — reducing it from the initial tariff of 120% of the value of the item, or an alternative flat fee of $100. While the flat fee will remain in place, it will not be raised to $200 next month as previously planned, per the announcement. 

The amendment comes less than two weeks after the de minimis exemption was initially closed, having first been brought in under the Tariff Act in 1938. Back then, the cap was set at $1, but the threshold has been raised several times since. From 2016 until very recently, shipments of goods worth less than $800 could enter the US duty-free. As a result, shipments under the rule boomed: according to US Customs and Border Protection, the number of de minimis packages entering the country surged to more than 1.36 billion in 2024 — the equivalent of 43 packages every single second — accounting for more than 90% of all shipments to the US.

De minimis shipments
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Goods, things, small packages

Over the last decade, among the biggest winners of the tax exemption have been international retailers peddling cheap items to the US... as well as their die-hard bargain-seeking customers. At first glance, it appeared as though small package import tariffs were left out of the trade truce, but now it seems that Chinese fast-fashion giants may not have to brace for the fallout of hiking their prices further after all.

Indeed, Bloomberg reported last Wednesday that both Temu, owned by PDD Holdings, and Shein had seen double-digit sales declines — falling 17% and 23%, respectively, from April 25 to May 1 — after raising prices to cover the increased costs incurred by tariffs.

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