Tariff Truce: US Halves China Parcel Duty to 54%, Gives Shein & Temu Breathing Room

The United States has slashed the punitive “de minimis” tariff on low-value Chinese imports to 54%, down from 120%, effective May 14. The White House executive order, released Monday, marks a significant softening in President Donald Trump’s earlier aggressive trade posture — particularly against fast-growing Chinese e-commerce giants like Shein and Temu.

$800 Rule Returns, but with a Fee

Under the new directive, packages valued at up to $800 entering via postal services from China — previously duty-free — will now face either a 54% tariff or a flat fee of $100 per item. Carriers will choose the lower of the two. The earlier proposal to double the flat fee to $200 has been shelved, bringing relief to both retailers and consumers.

This adjustment follows a broader Geneva agreement between Washington and Beijing that unwinds most tariffs imposed since April. The deal slashes levies on a wide range of goods — with the U.S. cutting its general tariff to 10% and China to 30% for at least 90 days.

Boom Times Are Over, But Window Remains

The reduced duty still represents a steep cost, but industry insiders say it gives companies time to adjust. Jianlong Hu, CEO of Brands Factory, a Chinese e-commerce consultancy, remarked, “The golden age of small parcel delivery to the U.S. is over. But this buys players like Shein and Temu breathing space.”

Shein, which thrives on rapid delivery of thousands of fashion items, is expected to continue air-freighting some orders despite the tariffs. Temu may shift more volume to sea freight or U.S. warehouses to avoid rising costs.

From Loophole to Liability

The de minimis rule, dating back to 1938, had allowed duty-free entry of goods under $800. Critics on both sides of the aisle had labeled it a loophole that flooded U.S. markets with cheap Chinese products and even illicit drugs. In February, Trump axed the exemption entirely, imposing a 120% tariff and proposing a $200 fee — sparking outrage in Beijing.

The rollback now offers short-term relief, but it may not last. Retailers are expected to use the window to restock and diversify as faith in U.S. market stability wanes.

Yuan Rallies, Planes Fly Again

Markets cheered the de-escalation. China’s yuan hit a six-month high, and Beijing reportedly gave the green light to resume deliveries of U.S.-made aircraft. But the message is clear: overdependence on the U.S. comes with risk.

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