Trump's Massive Tariff Still Impacts Affordable China Imports—Despite Recent Reductions
Key Highlights:
- US reduces tariff on cheap imports from China, but hefty fees remain
- Shein and Temu shoppers still suffer from delays and price hikes
- Tariff policy still hurts lower-income American families the most
Despite recent reductions, Trump-era tariffs on Chinese imports continue to drive up costs for American shoppers in millions who rely on super-cheap e-commerce sites like Shein and Temu. Despite cutting some of these fees, the tariffs that remain continue to fragment online shopping and increase the cost of everyday household items.
What Changed in the China Tariff Policy?
Earlier this week, the Trump administration lowered tariffs on "de minimis" packages—packages valued at \\$800 or less—from a punitive 120% to 54%. For commercial carriers like UPS and FedEx, the tariff was lowered from 145% to 30%. The controversial \\$100 flat rate fee, which had doubled through June 1, has also been scrapped, pursuant to a recent executive order to go into effect after midnight Wednesday.
But these developments don't mark the end of the US-China trade war. Rather, they reflect a temporary de-escalation of tensions, with China lowering its tariffs on US products to 10% for 90 days, while the majority of US tariffs on Chinese goods stay at 30% over the same time.
How Tariffs Still Impact Shein and Temu Shoppers
The reduced 54% tariff applies only to packages shipped via national postal carriers like USPS. Nonetheless, for courier delivery services like FedEx and UPS, the 30% rate applies. That is a steep cost for consumers who make purchases from affordable Chinese retailers like Temu and Shein.
Trade experts state that this tariff burden will mostly fall on low-income Americans who depend on inexpensive goods from these websites. With slow deliveries and rising costs, essential items like apparel and household essentials are becoming too expensive.
"It's better than the alternative," said Clark Packard, a trade policy analyst with the Cato Institute, "but it's still a big disruption for regular consumers."
Why Tariffs on Low-Value Imports Stay So High
The Trump administration maintains the high tariffs to deter illegal drugs—like fentanyl—that authorities claim are trafficked into the US in low-value packages. Critics also maintain that the de minimis exemption advantages unfairly US firms and opens up the floodgates for imitations or unsafe goods.
E-commerce Platforms Change Shipping Strategies
The de minimis exemption's end this month precipitated instant disruption. Some customers reported Shein and Temu prices went up overnight, and USPS temporarily blocked Chinese deliveries. In response, Temu changed its shipping model, rerouting all U.S. sales through U.S.-based sellers and warehouses.
While tariff drama unfolds, companies are taking action. Shein and Temu are warehousing merchandise in US warehouses to avoid unnecessary holdups and tariff spikes, particularly ahead of the mad holiday shopping season. Temu, for instance, has instructed suppliers to ship in bulk directly to US warehouses, foregoing its traditional China-enabled model of fulfillment.
However, it is noticed by American consumers that the majority of products are presently out of stock or unavailable—an alert that even huge-scale e-commerce giants fall behind.
Who Suffers the Most?
Weaker Americans remain the worst hit. The joint study between UCLA and Yale economists revealed that 48% of de minimis packages reach the lowest-income ZIP codes, whereas just 22% to the highest-income regions.
With tariffs still in force, and even reduced rates continuing to tighten supply chains, frugal consumers suffer most in this US-China tariff war.
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