Cheap shipments from China are no longer duty-free
FILE-Aerial view of a cargo ship carrying containers for export sailing at Qingdao Qianwan Container Terminal on April 5, 2025 in Qingdao, Shandong Province of China. (Photo by Han Jiajun/VCG via Getty Images)
The Trump administration is ending a duty-free exemption on low-value imports from China on Friday. This latest action, which applies to goods from China and Hong Kong, comes in addition to President Donald Trump's new tariffs totaling 145% on China.
The Associated Press reported that Beijing retaliated with tariffs of 125% on the U.S., provoking a trade war between the world’s two largest economies.
What does the duty-free exemption mean for consumers?
Why you should care:
Consumers can expect higher prices and delivery delays now that packages will go through a complex customs process to enter the U.S. involving declaration and duty payment.
The Associated Press reported that businesses may consider tariffs at the last price, or they can list them separately in the same way as sales taxes. For example, Temu, which is owned by the Chinese e-commerce company PDD Holdings, now lists "import charges" that have reportedly doubled prices of goods.
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And Shein, which is based in Singapore, has a checkout banner that reads, "Tariffs are included in the price you pay. You’ll never have to pay extra at delivery."
Separately, Amazon announced that it wasn't going to display added tariff costs next to merchandise prices on its website amid a report that fueled speculation that the e-commerce organization would display the new import charges, sparking criticism from the White House.
What is the de minimis provision?
Dig deeper:
The "de minimis" exemption was intended to help the flow of small packages with a value of no more than $5, the equivalent of $109 today.
RELATED: Temu adds 'import charges' after Trump tariffs: What to know
According to the AP, the value later rose to $800 in 2016 Chinese exports of low-value packages soared to $66 billion in 2023, up from $5.3 billion in 2018, per a February report by the Congressional Research Service. And the U.S. market has been a major destination.
In April, President Donald Trump signed an executive order to close the "de minimis" customs exemption on May 2.
How will it impact sellers and carriers?
Local perspective:
Parcel carriers will be tasked with collecting duties, and the paperwork to conform with the new rule could result not only in higher prices but also delays and even disruptions to delivery, said Ram Ben Tzion of the vetting platform Publican.
Major commercial carriers like UPS and FedEx tell the AP they are prepared to collect duties on international parcels to comply with local laws, including the new U.S. rule.
The AP noted that commercial carriers will collect 145% tariffs on declared values. The U.S. Postal Service has the option to either charge a 120% tariff on low-value packages or a flat fee of $100 per shipment, which is set to rise to $200 on June 1.
The U.S. Customs and Border Protection says it "stands ready to fully implement the restrictions on de minimis shipments and collect all revenue owed for these shipments on May 2, 2025."
The Source: Information for this story was provided by the Associated Press, which has background on the duty-free exemption and when it takes effect. This story was reported from Washington, D.C.