Most Americans may have hardly noticed President Donald Trump’s wide-reaching tariffs – until recently.
That is because a large shipping loophole ran out at one minute past midnight on Friday. The de minimis exemption, to use its official term, permitted imports of merchandise valued at $800 or less to enter the US without paying duties, frequently more or less passing over time-consuming inspections and paperwork.
The loophole enabled countless Americans to shop in a new way, with super-low-cost Chinese e-commerce platforms such as Shein, Temu and AliExpress to flood homes in America with everything from yarn to outdoor furniture, clothing to camera equipment and beyond.
Its imminent demise has rung warning bells throughout social media, with a floor rate of as much as 145% depending on carrier to be imposed on Chinese imports starting next week, potentially doubling the price of all of those inexpensive imports bargain hunters in America eagerly bought.
And elimination of the de minimis exemption for Chinese products will also reduce abstract, complex, messy, and convoluted trade policy to a much more straightforward thing: a receipt.
These major carriers such as UPS, FedEx, DHL and the United States Postal Service claim they are ready for the implementation. The government also states it is ready; a US Customs and Border Protection spokesperson said to CNN “We are ready and capable of conducting heightened package inspections and enforcing orders effectively."
Whether average American consumers are ready for them is another issue.
Of tchotchkes and trade policy
When President Donald Trump first closed the de minimis for Chinese and Hong Kong merchandise in early this year, it was a time of chaos.
USPS temporarily suspended delivering packages from China. The delivery times for packages that were sent were extended with minimal package tracking information in the US.
At the center of the matter: the volume of packages. A congressional study reports that over 80% of total US e-commerce shipments in 2022 were de minimis imports, with virtually all of them originating in China.
CBP said it processes "almost 4 million duty-free de minimis shipments a day." Most of them are reported to be originating in China and Hong Kong. A total of 1.36 billion packages arrived in the US in the last fiscal year through the de minimis exemption, CBP reported.
That is a plethora of dog bandanas, beading sets and frosting spreaders and trinkets. Everyday users of Temu and Shein informed CNN this week they have increasingly come to rely on the site because they have found that made-in-the-USA merchandise has become too expensive.
"I cannot even buy from Temu anymore and I couldn't even buy in this nation to begin with," said Rena Scott, a veteran nurse who is 64 years old and lives in Virginia.
The poorest zip areas will be most affected by the demise of low-cost Chinese e-commerce sites. Some 48% of de minimis packages were sent to America's poorest zip codes and 22% to its richest zip codes in February data gathered by UCLA and Yale economists.
The increases may occur in steps. Already, for instance, Shein and Temu previously bumped prices in anticipation of de minimis exemption expiration by raising prices on a number of products followed by CNN.
"Because of new global trade regulation and tariffs, our business costs have increased. To continue to be able to bring you the products you love without sacrificing quality, we will be adjusting prices," Shein wrote in a recent announcement on social media. "We're working hard to keep prices low and reduce the effects on you."
A representative for Temu explained that it is transforming its business model to incentivise greater local fulfillment, increasing the quantity of US sellers on its platform.
"Temu prices are unaffected for U.S. consumers when switching to a local fulfillment model," a statement cited by the company said. "All U.S. sales are now made by sellers based in America, with orders shipping locally."
Whether additional price hikes are in store with them and other retailers is uncertain.
Shippers will also pay more. DHL explained to CNN it has "increased our staffing levels in order to support the additional volume of informal entry clearances we expect."
Imports of Chinese and Hong Kong products sent through UPS, DHL and FedEx will face a starting point 145% tariff, in addition to any product-specific tariffs. Imports sent through USPS will face a starting point rate of 120% or a flat rate of $100 for each postal item. Beginning June 1, this fee will be raised to a flat rate of $200.
Many of Trump's MAGA base stick with the president, writing on social sites and in reports in the press that they will weather economic turbulence with their trust in the president. But more and more Americans have a different feeling.
59% of the public today believe Trump’s policies have made US economic conditions even worse, a CNN-SSRS poll last month found.
The poll was taken between April 17–24, following the White House initial announcement of wide-ranging new tariffs against dozens of countries and then a moratorium on most of them. Despite this, 6 in every 10 people reported that policies instituted by Trump have made living in their community more expensive.
On Friday, with the de minimis exemption to expire, several Americans may see those prices go even higher.
"It is a very, it is a big deal," Trump declared at a Cabinet meeting on Thursday, denouncing the de minimis exception "a big scam."
And we finished it. We put a definitive end to it.
Source: CNN News
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