Parcels coming from mainland China and Hong Kong will now be stopped by the US Postal Service as the Government clamps down on imported goods coming in without taxes or fees.
The suspension – which is “until further notice” – is part of a wider doubling down on products coming into the US from China.
This includes the 10% tariff on China imports that President Trump has put into place; alongside threatened tariffs on Canadian and Mexican goods.
Closing a Loophole
The parcels are being stopped after the Government closed a loophole that allowed small packages with a worth of $800 or less to be sent to the US without paying tax or fees. The announcement gave no reasons and said that the suspension was affective from February 4.
The move will have a huge impact on companies like Temu and Shein who sell lower value goods; and were reaching millions of US customers. According to the Business of Apps, Shein has an estimated 88.8 million active shoppers of which 17.3 million are based in the US.
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To give a sense of the scale of packages, in 2023, a US Government report revealed that nearly a third of small packages coming into the US were Shein and Temu alone.
Trade War Heating Up
Changes were afoot to this tax exemption under the Biden Administration, reports BBC News; but the speed in which changes are now happening reflects Trump’s focus on tariffs and pushing the US people towards buying goods made in the US. The White House press secretary, Karoline Leavitt, said that the tariff on Chinese goods was put in place because “He [Trump] is not going to allow China to continue to source and distribute deadly fentanyl into our country.”
However, China has taken action in retaliation to the tariffs and has stuck a 15% levy on coal and liquefied natural gas (LNG) and 10% on Crude oil, agricultural machinery and large-engine cars.
“As a matter of principle, I want to point out that we urge the United States to stop politicising trade and economic issues and using them as tools, and to stop the unreasonable suppression of Chinese companies,” Lin Jian, a ministry spokesperson, told journalists at a press briefing.
What Will Musk Say?
While clothes and accessories are not Elon Musk’s thing, he has been vocal about tariffs in the past and China’s retaliatory move could impact Tesla.
He was vocal in opposition when Biden introduced an array of levies in May last year. “Neither Tesla nor I asked for these tariffs, in fact, I was surprised when they were announced. Things that inhibit freedom of exchange or distort the market are not good,” Musk told a Paris tech conference.
This was, however, a roll-back from comments he made only months before that trade barriers were needed to stop China from “demolish[ing] most other car companies in the world”.
Forbes is reporting that Musk has been hit dramatically by the tariffs. Tesla suffered the largest percentage loss in its stock valuation among the 46 US companies valued at $200 billion or more. This knocked $11.8 billion off of Musk’s net worth.
Musk is uncharacteristically quiet on X about this at the moment but check again in the middle of the night; and he may have unleashed his views.
