In a significant move affecting international commerce, the United States Postal Service has implemented a suspension on incoming package deliveries from China and Hong Kong, impacting major online retailers like Shein and Temu. The suspension specifically targets parcels while allowing letters and flat mail to continue unimpeded.
This action follows former President Trump’s recent elimination of the “de minimis” rule for Chinese imports, which previously permitted duty-free entry of packages valued under $800. The rule change, accompanied by a new 10% tariff on goods from China and Hong Kong, took effect early Tuesday in Washington.
The policy shift aims to address a long-exploited loophole that enabled Chinese e-commerce platforms to gain competitive advantages over domestic retailers like Amazon through high-volume small package shipments. Critics have raised concerns about the difficulty in monitoring these parcels and their potential to contain illegal or hazardous materials.
Statistics from U.S. Customs and Border Protection reveal that de minimis shipments into the United States reached 1.4 billion packages during fiscal year 2024, representing a twofold increase from 2022 levels. Online retailers Temu and Shein were major contributors to this surge.
The impact of the suspension may be somewhat mitigated by the evolution of cross-border shipping networks. According to a May 2023 U.S. Office of Inspector General report, alternative postal operators have increasingly taken over USPS’s role in handling lightweight e-commerce packages from China.
U.S. officials have expressed particular concern about the use of parcel mail as a conduit for illegal substances, including fentanyl. White House trade adviser Peter Navarro highlighted how Chinese cartels have exploited shipping loopholes to transport various illegal drugs into the country.
While similar tariff orders for Mexico and Canada have been
temporarily suspended, the China measures proceeded as planned. There are indications of potential diplomatic engagement, with Trump suggesting a possible discussion with Chinese leadership, though specific details remain unclear.
The market response has been notable, with major Chinese e-commerce companies experiencing significant stock declines. Alibaba saw a more than 2% drop in Hong Kong trading, while JD.com experienced a steeper decline of over 5%. The broader Hang Seng China index also fell by 1.8%.
Goldman Sachs analysis indicates that PDD’s Temu platform, which derives approximately 40% of its Gross Merchandise Value from U.S. operations, stands to be particularly affected. However, the platform has been diversifying its global presence, with U.S. users now representing only 15% of its monthly active users as of December 2024, down from 100% at its launch in early 2023.
The platform has also been adapting its business model, shifting from exclusively direct air freight shipments to incorporating sea freight and traditional trade channels, which now account for 25% of U.S. operations. Temu has established semi-entrusted models in 19 countries as of January 2025, reducing its dependence on de minimis shipping arrangements.
Looking forward, industry observers are monitoring potential additional tariffs on cross-border e-commerce goods and possible expansion of measures like the Uyghur Forced Labor Prevention Act. Chinese platforms are expected to continue geographical
diversification and business model adaptation, including increased engagement with local U.S. merchants, though the possibility of other countries adopting similar restrictions remains a concern.