HONG KONG — Individuals are prone to pay extra for merchandise from widespread Chinese language e-commerce platforms like Shein and Temu because the U.S. Postal Service mentioned it might cease accepting parcels from China and Hong Kong.
The transfer was introduced Tuesday, coming after the U.S. imposed an extra 10% tariff on Chinese language items and ended a customs exception that allowed small worth parcels to enter the U.S. with out paying tax. Canada and Mexico managed to barter a month-long reprieve from 25% tariffs threatened by U.S. President Donald Trump.
It’s going to seemingly impression on-line procuring locations like Shein and Temu, widespread with youthful buyers within the U.S. for reasonable clothes and different merchandise, often shipped immediately from China.
Low-cost, direct postal service helps these firms maintain prices low, as did the “de minimis” exemption that beforehand allowed shipments to go tax-free if their worth is below $800.
The momentary suspension by USPS is prone to delay shipments and will imply greater costs in the long run.
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What precisely did the USPS announce?
The U.S. Postal Service mentioned in a discover that it might briefly cease accepting inbound parcels from the China and Hong Kong Posts till additional discover.
Letters and flats — mail that measures as much as 15 inches (38 centimeters) lengthy or 3/4 inches (1.9 centimeters) thick — should not affected.
Why did it occur?
The USPS didn’t state a cause in a short announcement, however the suspension got here after Trump closed the “de minimis” customs exemption this week that allowed buyers and importers to keep away from duties on packages value under $800.
The exemption was eliminated as a part of an government order to levy a ten% tariff on Chinese language items.
U.S. Customs and Border Safety beforehand acknowledged that it processes a median of over 4 million “de minimis” imports every week.
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What’s the impression and who’s most affected?
Customers and corporations alike will not have the ability to ship parcels to the U.S. from Hong Kong or China.
This transfer is prone to impression Chinese language e-commerce corporations like Shein and Temu, though Shein is prone to be extra affected, in line with Jacob Cooke, CEO of e-commerce advertising and marketing company WPIC Advertising and marketing + Applied sciences.
Each firms have vital market share within the U.S.
“In comparison with Temu, Shein depends extra closely on USPS for direct-to-consumer delivery from China, and with out this channel, it should rely extra on personal carriers,” mentioned Cooke.
“That may improve logistics prices, which together with the latest scrapping of the de minimis exemption for many merchandise from China, might erode its worth benefit.”
Cooke mentioned Temu operates on a semi-consignment mannequin and infrequently ships bulk orders to the U.S. earlier than fulfilling orders domestically.
“Temu’s mannequin of sourcing low-cost items must also allow the platform to soak up greater logistics prices and stay worth aggressive,” he mentioned.
Shein and Temu didn’t instantly remark.
Chinese language Overseas Ministry spokesperson Lin Jian mentioned China would take “crucial measures” to guard its firms, and urged the U.S. to “cease politicizing financial and commerce points and utilizing them as a device, and to cease unreasonably suppressing Chinese language firms.”
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What are doable methods for firms to work across the challenge?
It’s unclear how lengthy the USPS suspension will final, however the effort to crack down on the de minimis excemption looks as if a longer-term shift in coverage, Cooke mentioned.
“Shein and Temu will merely have to rely extra on personal carriers as a workaround to the USPS suspension,” he mentioned.
In the long run, Shein might speed up its warehouse enlargement within the U.S., whereas Temu can double down on its semi-consignment mannequin. By delivery in bulk to the U.S. and fulfilling orders domestically, logistics price might be decreased, Cooke mentioned.
“Delivery in bulk to the U.S. and fulfilling domestically can scale back logistics prices, however for Shein, this poses a longer-term disruption to their enterprise mannequin which has relied on quickly creating new SKUs and delivery them on to customers,” Cooke mentioned.
