The Blubber

The United States will reduce tariffs on low-value imports from China under the “de minimis” rule, according to a White House executive order issued Monday — a move that signals continued efforts to cool tensions between the two largest global economies.

The tariff reduction targets major Chinese e-commerce platforms like Shein and Temu and follows a broader agreement between Washington and Beijing to roll back most of the mutual duties imposed since early April. That deal was reached during recent talks in Geneva.

Although the joint statement released in Geneva didn’t explicitly reference de minimis tariffs, the executive order confirms that, starting May 14, the U.S. will lower duties on qualifying shipments to 54% (down from 120%) for items worth up to $800 sent via postal services. A flat fee of $100 per package will remain an alternative option.

Carriers can choose to pay either the 54% tariff or the $100 fee, with logistics firms and freight forwarders typically collecting these charges from Chinese sellers ahead of time.

Previously, the de minimis exemption allowed goods valued at $800 or less to enter the U.S. duty-free with minimal inspection. But in February, President Donald Trump moved to revoke that benefit, imposing a 120% tariff or a $200 flat fee, citing concerns about misuse by companies like Shein and Temu, as well as the influx of illicit goods such as fentanyl.

Use of the de minimis channel has surged, with over 90% of all inbound shipments using it — about 60% of which originate in China, led by fast-shipping, direct-to-consumer retailers like Shein and Temu. According to 2024 congressional testimony from a U.S. Customs and Border Protection official, the average value of these packages was only $54 in fiscal year 2023.

The White House said Monday that the new lower tariff rate and the decision to maintain the flat fee at $100 — shelving the planned $200 increase — will go into effect at 12:01 a.m. ET on May 14, 2025.

China’s direct-to-consumer exports taking advantage of de minimis were worth $240 billion last year, representing about 7% of the country’s total exports and contributing roughly 1.3% to GDP, according to estimates from Nomura.

Jianlong Hu, CEO of Brands Factory, a consultancy specializing in Chinese cross-border e-commerce, noted that while the 54% tariff is still high, the shift signals the end of an era:
“Most sellers are holding off for now,” Hu said. “But it’s safe to say the golden age of small-package shipping from China to the U.S. is behind us.”

Shein may be hit harder by the change due to its reliance on frequent air shipments of fast-fashion inventory, whereas Temu operates with longer lead times and bulk logistics.