Small Packages From China Are Now Subject to US Tariffs. Here's What to Know
Those same goods are now subject to tariffs as high as 145 percent. In response to the change, Shein announced it would begin adjusting prices starting on April 25. Temu, meanwhile, is currently blocking US shoppers from seeing products shipped from China, effectively narrowing the number of goods for Americans to choose from. Other retailers have started displaying tariff surcharges in their online shopping carts to help consumers make sense of where added fees are coming from.
What will the end of de minimis mean for American businesses and consumers? Will China's ecommerce giants stop shipping to the United States altogether? WIRED senior business editor Louise Matsakis and senior China writer Zeyi Yang joined chatted with readers during a Reddit AMA this week to answer these questions and many others. Here's what to know:
What's the difference between the regular tariffs and the de minimis exemption?
Trump's blanket 145 percent tariffs on Chinese imports are having wide impacts on almost every industry, whereas the change to de minimis specifically hurts platforms like Temu and Shein. It's not wrong to say Temu was invented, in part, because of the de minimis exemption. It made shipping small packages directly from China affordable and fast, thus making Temu's original business model viable. With that gone, Temu will have to transition to a different business model in the US (which it has been trying already, and that's what's going on with the local warehouse products you are seeing now).
If the recent tariffs aren't removed, will Temu and other Chinese ecommerce sites eventually close down their operations in the US?
At this point, we really don't know, and Temu might not have made a decision one way or another. What we do know for now is that the American version of Temu has started showing only 'local' products. But one important piece of context that might be helpful to consider is that Temu is owned by a Chinese company, Pinduoduo, which is already one of the largest online shopping platforms in China.
So unlike, say, Amazon, it doesn't need the United States to survive in the long-term, and it might be willing to walk away if the business environment becomes untenable. Pinduoduo has invested pretty heavily in Temu's American business (it has spent billions on advertising to US consumers, for example), but it wouldn't be an existential loss if it chose to pull out and focus instead on other markets.
I have heard that ports in the US are starting to receive less shipments as tariffs take full effect. How long do you think it will take for this to affect the average American consumer and brick-and-mortar stores?
We have been talking to US retailers who don't sell on ecommerce websites, meaning they have their own stores or are suppliers to Walmart, Target, etc. These companies are also freaking out because many of them have complex supply chains in China and can't easily move their manufacturing operations to other countries.
From what we've seen, retailers usually have stockpiles of inventory that should last at least the next few months in the US already. If the tariffs don't come down to an acceptable level soon, however, shortages will start to become much more apparent maybe in the summer or early fall, depending on how prepared individual stores are. US retailers of Christmas ornaments and toys, for example, are really concerned right now even though the holiday is seven months away. Perhaps December is when some American consumers will eventually find out the impacts of these policies!
Would it be possible for Trump to give an exception to Amazon for tariffs and not other retailers? Could he do this without anyone knowing?
Even if Trump were to try to spare Amazon from his tariffs, it would be pretty difficult logistically. Amazon's marketplace has millions of third-party sellers that each operate their own businesses, and they're responsible for bringing in goods to the US and clearing the customs process. But Trump could offer Amazon and other retailers tax breaks, subsidies, or other economic benefits to help offset the impacts of the tariffs. That hasn't happened yet, but there have reportedly been discussions among Trump administration officials about potentially giving American farmers subsidies.
What percentage of sellers on Amazon are importing goods from China?
It's hard to say how many Amazon sellers import things from China, but estimates suggest that more than 50 percent of Amazon's top-selling independent merchants are based in China.
Are there actually enough custom agents to verify that things imported from other countries actually didn't originate from China? If so, how will they do this?
Trump's tariffs are definitely going to stretch the capabilities of US Customs and Border Protection (CBP) to inspect packages and where the goods inside them originated from. The US Postal Service actually stopped accepting packages from China for about a day earlier this year because they were so overwhelmed when Trump initially tried to end de minimis overnight. His administration later delayed the policy for several weeks, giving CBP more time to prepare.
How has the tariff situation affected the actual vendors making products?
Factories in China are being hit hard by the tariffs, and some are considering laying off workers. They all want to pivot to other markets like Brazil, Russia, and the European Union, but the reality is that consumers in these regions simply don't have nearly as much disposable income as Americans do. Factories will be able to make up some of their sales, but those alternative markets are also now going to be hypercompetitive.
Small business owners say they are getting hurt because of tariffs, so who is winning here?
Honestly, we can think of very few parties that are winning here, at least right now. Even if you want to manufacture in the US, you almost certainly will need to import machinery and raw materials from either China or another country—meaning you will have to pay these new tariffs, too. One winner, perhaps, is the environment. Higher prices will likely result in people buying less, and this could be a moment when consumers start to reflect on their consumption habits. But if that happens, it will also be bad news for the US economy.
What if Chinese goods are sold to a third party (such as Canada) and then resold to the US, would Trump figure it out?
This would be an example of tariff evasion and is illegal. Going through an intermediary country in this manner is known as "transshipment" and it does happen from time to time, but if a manufacturer or retailer gets caught, they can be subject to pretty steep fines.
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Prime Minister Justin Trudeau of Canada laid out plans to impose more than $100 billion in retaliatory tariffs against the United States, and made clear that Canada was doing so reluctantly. Credit Credit... Justin Tang/The Canadian Press, vía Associated Press Feb. 2 🌎 Facing widespread criticism over his tariff threats and their possible consequences for the economy, Mr. Trump acknowledged the possible negative consequences of the tariffs on social media. 'WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!),' he said. Feb. 3 🇨🇦 🇲🇽 🇪🇺 Mr. Trump agreed to a 30-day pause of his tariffs on Mexico and Canada while at the same time threatening new tariffs against the European Union. Read more › Video Credit Credit... Mexican Government TV via Reuters Feb. 4 🇨🇳 Mr. Trump's 10 percent tariffs on Chinese imports went into effect, and China responded with a series of retaliatory steps, including additional tariffs on products from the United States. 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Read more › Feb. 25 🌎 An executive order directed Mr. Trump's commerce secretary, Howard Lutnick, to investigate whether foreign production of copper posed a risk to national security, raising the prospects of tariffs on the material. White House officials did not share how much those tariffs would be, or when the inquiry could conclude. Read more › Feb. 27 🇨🇦 🇲🇽 🇨🇳 The president said the tariffs against Canada and Mexico — and an additional 10 percent tariff on Chinese goods — would go into effect on March 4 'as scheduled.' He said on social media that the action was necessary because 'Drugs are still pouring into our Country from Mexico and Canada at very high and unacceptable levels,' a claim not always supported by U.S. government reports. Read more › March 1 🇨🇦 Mr. Trump directed Mr. Lutnick to investigate whether imports of lumber threaten American national security. The results of the inquiry could lead to more tariffs on Canada, the largest exporter of wood to the United States. Read more › March 4 🇨🇦 🇲🇽 🇨🇳 Tariffs on imports from Canada, Mexico and China — the largest U.S. trading partners — went into effect. Prime Minister Justin Trudeau of Canada responded with tariffs of 25 percent on $155 billion of American goods. Read more › Video transcript Back bars 0:00 / 1:09 - 0:00 transcript The United States launched a trade war against Canada, their closest partner and ally, their closest friend. At the same time, they're talking about working positively with Russia, appeasing Vladimir Putin, a lying, murderous dictator. Make that make sense. Canadians are reasonable and we are polite, but we will not back down from a fight. Not when our country and the well-being of everyone in it is at stake. At the moment, the U.S. tariffs came into effect in the early hours of this morning, and so did the Canadian response. 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Mr. Trump said that his reversal on tariffs he had framed as vital to America's security had 'nothing to do with the market' after the tariff news sent shock waves through the economy. He said he would still impose 25 percent tariffs on imports of steel and aluminum on March 12, and that reciprocal tariffs on all U.S. trading partners were still on track for April 2. Read more › March 10 🇨🇳 🇨🇦 The Chinese government began imposing tariffs on many farm products from the United States. The tariffs included an additional 15 percent on American farm products like chicken and corn, and a 10 percent on products like soybeans and fruit. Ontario, Canada's most populous province, announced its own tariffs, including a 25 percent surcharge on the electricity exported to Michigan, Minnesota and New York. 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Read more › March 13 🇪🇺 Citing the European Union's plans for 50 percent tariffs on U.S. whiskey and several other American products, set to kick in on April 1, Mr. Trump floated one of his largest tariff threats to date: a 200 percent charge on all wines, Champagnes and alcoholic products from the E.U.'s member nations. Read more › March 24 🌎 Countries who purchase oil from Venezuela — either directly or from a third party — faced tariffs of 25 percent on their exports to the United States, to begin on or after April 2. Read more › March 26 🌎 Mr. Trump said he would impose a 25 percent tariff on all cars and car parts shipped into the United States, including American brands assembled overseas. Read more › Video transcript Back bars 0:00 / 1:38 - 0:00 transcript World Leaders React to Trump's Auto Tariffs President Trump's announcement of 25 percent tariffs on imported cars and auto parts prompted world leaders to rebuke the decision. 'It's my solemn promise that when President Trump threatens us again, we will fight back. We will fight back with everything we have to get the best deal for Canada.' President Trump's announcement of 25 percent tariffs on imported cars and auto parts prompted world leaders to rebuke the decision. Credit Credit... Nic Antaya for The New York Times April 2 🌎 A 10 percent tariff was applied to all nations importing goods to the United States — unless a tariff had already been announced on a product or industry. But that base line 10 percent was to be supplemented in certain cases by additional reciprocal tariffs that vary by nation. That meant dozens of countries, including many U.S. allies, faced tariffs far higher than they expected. Read more › Video transcript Back bars 0:00 / 1:17 - 0:00 transcript Trump Announces Tariffs on Global Trading Partners During a news conference, President Trump announced that he would impose a baseline 10 percent tariff on all trading partners, as well as double-digit 'reciprocal tariffs' on dozens of other countries. This is one of the most important days, in my opinion, in American history. It's our declaration of economic independence. Jobs and factories will come roaring back into our country. China — first row, China 67 percent, that's tariffs charged to the U.S.A., including currency manipulation and trade barriers. So 67 percent, so we're going to be charging a discounted reciprocal tariff of 34 percent, I think. In other words, they charge us, we charge them. We charge them less. So how can anybody be upset? They will be because we never charge anybody anything. But now we're going to charge. European Union, they're very tough, very, very tough traders. You think of European Union, very friendly. They rip us off. It's so sad to see. It's going to be 'Liberation Day' in America. And it's going to be a day that hopefully you're going to look back in years to come and you're going to say, you know, he was right. This has turned out to be one of the most important days in the history of our country. During a news conference, President Trump announced that he would impose a baseline 10 percent tariff on all trading partners, as well as double-digit 'reciprocal tariffs' on dozens of other countries. Credit Credit... Doug Mills/The New York Times April 4 🇨🇳 China's Finance Ministry announced a 34 percent tariff on imports from the United States, matching Mr. Trump's plans for 34 percent tariffs on exports from China. The Chinese Commerce Ministry also barred a group of 11 American companies from doing business in China. Read more › April 5 🇻🇳 Vietnam asked Mr. Trump to delay imposing tariffs for at least 45 days. The United States is Vietnam's largest export market, and the 46 percent tariff rate was among the highest any country faced. Read more › April 7 🇧🇩🇨🇳 Bangladesh asked for a three-month reprieve before any tariffs would be imposed on its exports to the United States. Read more › Mr. Trump threatened to counter Beijing's retaliatory tariffs with an additional 50 percent tariff on China. Those tariffs would be additive, meaning that China could face 104 percent taxes on all exports. Read more › Video Lin Jian, the spokesman for the Chinese Foreign Ministry, accused the United States of 'economic bullying' after President Trump threatened an additional 50 percent tariff on Chinese imports. Credit Credit... Associated Press April 9 🌎 Mr. Trump's punishing tariffs on some of America's biggest trading partners took effect. Chinese goods were subject to a 104 percent tariff, European goods faced a 20 percent import tax, Japanese goods were taxed 24 percent and Vietnamese products 46 percent. China responded with an additional 50 percent tariff on U.S. goods, meaning they faced an additional 84 percent import tax. China's new tariffs took effect 12 hours after Mr. Trump's tariffs went into place. Read more › The European Union also approved new tariffs against the United States, to take effect the following week. Read more › Video transcript Back bars 0:00 / 1:37 - 0:00 transcript Trump Pauses 'Reciprocal' Tariffs for Most Countries President Trump decided to pause his 'reciprocal' tariffs on most countries, excluding China, just hours after they went into effect. 'Hello, everybody.' [clapping] 'Can you walk us through your thinking about why you decided to put a 90-day pause.' 'Well, I thought that people were jumping a little bit out of line. They were getting yippy, you know. They were getting a little bit yippy, a little bit afraid.' 'Well, I'm not calling it a trade war, but I am saying that China has escalated, and President Trump responded very courageously to that. And we are going to work on a solution with our trading partners. You might even say that he goaded China into a bad position. They responded — they have shown themselves to the world to be the bad actors. And we are willing to cooperate with our allies and with our trading partners who did not retaliate. It wasn't a hard message. Don't retaliate. Things will turn out well.' [unclear] 'I'll take a look at this. As time goes by, we're going to take a look at it. There are some that have been hard. There are some that, by the nature of the company, get hit a little bit harder. And we'll take a look at that.' [unclear] 'Just instinctively, more than anything else. I mean, you almost can't take a pencil to paper. It's really more of an instinct, I think, than anything else.' President Trump decided to pause his 'reciprocal' tariffs on most countries, excluding China, just hours after they went into effect. Credit Credit... Eric Lee/The New York Times … later on April 9 🌎 In an abrupt reversal, Mr. Trump said he would back down on his reciprocal tariffs for the next 90 days, bringing tariff levels to a universal 10 percent. China would not be included in that pause, he said. Instead, he raised tariffs on its exports to 125 percent after Beijing announced a new round of retaliation. April 10 🇨🇳🇪🇺 The White House clarified that the 125 percent tariff on Chinese goods was in addition to a 20 percent tariff that Mr. Trump had already imposed on China, bringing the total tariffs on China imposed by the Trump administration to 145 percent. The European Union announced a plan to pause its own reciprocal tariffs in response to Mr. Trump's reversal. Read more › April 11 🌎 Mr. Trump issued a ruling that spared many electronics — including smartphones, computers, semiconductors and routes and modems — from some new tariffs. The long list of imports, which include Chinese products, would be exempt from reciprocal tariffs, but other levies would still apply. Read more › April 13 🌎 The electronics exceptions announced on April 11 were recast as temporary by Mr. Trump and his top aides. Mr. Trump said he would be pursuing new tariffs on computer chips. Read more › April 29 🌎 Mr. Trump signed two executive orders that reversed course on some tariffs for carmakers. The 25 percent tariffs were modified so they would not be 'stacked' with other tariffs such as those on steel and aluminum, a White House official said. Read more › Video transcript Back bars 0:00 / 0:50 - 0:00 transcript U.S. and British Leaders Celebrate Agreement on Trade Framework President Trump and Prime Minister Keir Starmer announced an agreement for a trade framework over speakerphone. 'With this deal, the U.K. joins the United States in affirming that reciprocity and fairness is an essential and vital principle of international trade. We really do, we have a great relationship. I want to just say that the representatives of U.K. have been so professional, and it's been an honor doing business with all of them, and in particular the prime minister. And I'd like to introduce him now to say a few words. Mr. Prime Minister, please take it away.' 'Thank you, Mr. President — Donald — and this is a really fantastic historic day in which we can announce this deal between our two great countries. And I think it's a real tribute to the history that we have of working so closely together.' President Trump and Prime Minister Keir Starmer announced an agreement for a trade framework over speakerphone. Credit Credit... Eric Lee/The New York Times May 8 🇬🇧 The United States and Britain reached a deal that would reduce tariffs on some imports. Under the agreement, Britain would drop its tariffs on some U.S. products and the United States would pare back tariffs on cars and steel, while keeping a 10 percent levy in place for all British exports. But the deal has not been finalized, and there could be weeks of negotiations to come. Read more › May 12 🇨🇳 The White House agreed to back off, for now, from its steepest tariffs against China. Under the agreement, the United States would cut tariffs on Chinese imports to 30 percent from 145 percent, and China would reduce its levies on American goods to 10 percent from 125 percent. Read more › May 23 🇪🇺 In a post on social media, Mr. Trump threatened higher tariffs on the European Union, saying that discussions 'are going nowhere.' He recommended a 50 percent tariff on European imports that would begin June 1. Read more › May 25 🇪🇺 After a phone call with Ursula von der Leyen, the president of the European Commission, Mr. Trump said he would delay imposing his threatened 50 percent tariffs on all imports from the European Union until July 9 to allow more time for trade negotiations. Read more › May 30 🌎 Speaking to steelworkers near Pittsburgh, Mr. Trump pledged to double tariffs on steel to 50 percent, from 25 percent. He also endorsed a 'planned partnership' between U.S. Steel and Nippon Steel before conceding that he had not seen or signed off on the details of the deal. Read more › June 4 🌎 Tariffs on steel and aluminum imports rose to 50 percent from 25 percent just after midnight. The White House said the increase would address 'trade practices that undermine national security.' Read more › June 16 🇬🇧 The United States and Britain finalized their trade agreement to lower tariffs on British cars, steel and aluminum, and aerospace equipment. Read more › June 27 🇨🇳 China confirmed the details of a trade framework with the Trump administration a day after Mr. Trump said his administration had 'signed' a deal with China. The deal, China's Ministry of Commerce said, would loosen exports of rare earth minerals to the United States and lift some restrictions on U.S. goods to China. Read more › July 2 🇻🇳 The United States agreed to a trade deal with Vietnam that would indirectly affect China, an important trading partner of Vietnam. The provision, Mr. Trump said, would impose a 20 percent tariff on all imports and a 40 percent tariff on any 'transshipping.' Read more › Video transcript Back bars 0:00 / 1:00 - 0:00 transcript Trump Says Countries Will Receive Letters About New Tariffs Speaking to the press after arriving at Joint Base Andrews, President Trump said the tariffs would range from 10 to 70 percent. 'It's a lot of money, but we're giving them a bargain,' Mr. Trump said. Reporter: 'For countries that don't get a letter right away and that you haven't made a deal —' 'No, we're going to start sending letters out to various countries starting tomorrow. We'll probably have 10 or 12 go out tomorrow and over the next few days, I think by the 9th they'll be fully covered and they'll range in value from maybe 60 or 70 percent tariffs to 10 and 20 percent tariffs.' And it's very important. It's a lot of money for the country. But we're giving them a bargain. Because if I went by the true deficits or by other ways of measuring, it could be a lot more. We don't want to, I don't want to stretch it too much. We want to keep it pretty reasonable. And I think it's actually I think it's very reasonable.' Speaking to the press after arriving at Joint Base Andrews, President Trump said the tariffs would range from 10 to 70 percent. 'It's a lot of money, but we're giving them a bargain,' Mr. Trump said. Credit Credit... Haiyun Jiang/The New York Times July 9 🌎 Mr. Trump informed at least 21 countries that their exports will face tariffs of at least 20 percent starting Aug. 1 unless they reach new trade deals with the United States. He threatened to raise rates further if countries tried to evade the U.S. duties or retaliated with their own import taxes. Read more › He also issued a 50 percent tariff on copper, effective Aug. 1. The move sent U.S. copper prices surging, and has caused concern in some of the industries Mr. Trump has said he wants to protect. Read more › Mr. Trump also said he planned to impose a 50 percent tariff on all Brazilian imports. President Luiz Inácio Lula da Silva of Brazil promised to reciprocate. Read more › July 11 🇪🇺🇲🇽 Months of careful negotiations were upended when Mr. Trump said he would place a 30 percent tariff on goods from the European Union and Mexico. The tariffs would take effect on Aug. 1, he said in two letters posted on social media. He threatened to raise those rates even higher should the E.U. or Mexico issue retaliatory tariffs. Read more › July 14 🇪🇺 Maros Sefcovic, the European Union's key negotiator, said that Mr. Trump's about-face on tariffs was disappointing given he felt that the two sides were 'very close to an agreement.' Mr. Sefcovic spoke with his American counterparts almost every day last week, he said, and Mr. Trump's letter created 'a whole different dynamic.' Read more › President Claudia Sheinbaum of Mexico said her country is hoping to reach an agreement with the United States before Aug. 1. 'We do our part; they have to do their part as well,' she said. Read more › July 16 🇮🇩 Indonesia agreed to roll back multiple trade barriers to reach an agreement with the United States. U.S. exports to Indonesia would not be charged tariffs, and Indonesian goods would face a 19 percent tariff in the United States. 'We understand their interests, and they understand ours,' President Prabowo Subianto of Indonesia said. Read more › July 22 🇯🇵 In a social media post, Mr. Trump said he had reached a trade deal with Japan, calling it 'perhaps the largest deal ever made.' The Japanese government agreed to invest $550 billion in the United States, with the U.S. government receiving 90 percent of the profits. Japanese exports to the country would be charged a 15 percent tariff, instead the 25 percent tariff threatened by Mr. Trump. Read more › Video transcript Back bars 0:00 / 1:04 - 0:00 transcript U.S. and Europe Reach Preliminary Trade Deal With 15% Tariffs The deal, which would set a 15 percent tariff on most E.U. goods, averted what could have become a painful trade war with the United States' biggest source of imports. 'We are agreeing that the tariff straight across for automobiles and everything else will be a straight-across tariff of 15 percent.' 'Indeed, basically, the European market is open. It's 450 million people. So, it's a good deal. It's a huge deal. It was tough negotiations. I knew it at the beginning and it was indeed very tough. But we came to a good conclusion for both sides.' 'I think it's great that we made a deal today instead of playing games and maybe not making a deal at all. I think it's a — I'm going to let you say, but I think it's the biggest deal ever made. Thank you very much. Congratulations.' [clapping] The deal, which would set a 15 percent tariff on most E.U. goods, averted what could have become a painful trade war with the United States' biggest source of imports. Credit Credit... Tierney L. Cross/The New York Times July 27 🇪🇺 The United States and the European Union reached a trade deal that set a 15 percent base tariff on most E.U. exports, including cars. Mr. Trump said that the European Union had agreed to increase its investment in the United States by more than $600 billion and to purchase $750 billion of American energy. The sides also agreed to drop tariffs to zero on some goods, including aircraft, certain chemicals and generic drugs, and some agricultural products, said Ursula von der Leyen, the president of the European Commission, the bloc's executive arm. The agreement will 'rebalance, but enable trade on both sides,' she said. Read more › July 30 🇮🇳🇧🇷🇰🇷🇹🇭🇰🇭 Mr. Trump announced that imports from India to the United States would be subjected to a 25 percent tariff as of Aug. 1, and he berated India over trade barriers and its purchases of energy and military equipment from Russia. Read more › The United States also applied tariffs of 50 percent on Brazilian goods two days ahead of schedule and issued sanctions on the Brazilian judge who is overseeing the criminal case against former President Jair Bolsonaro, an ally of Mr. Trump. Read more › At the end of the day, Mr. Trump announced a trade deal with South Korea that placed 15 percent tariffs on South Korean goods. As part of the agreement, South Korea committed to investing $350 billion in the United States and will spend $100 billion on liqufieid natural gas. More announcements will be made when South Korea's president, Lee Jae Myung, visits Washington in two weeks, Mr. Trump said. Read more › Thailand and Cambodia also reached trade agreements with the United States, Commerce Secretary Howard Lutnick said on Wednesday night. He declined to elaborate on details of the new tariff rates. Both nations had been facing a potential tariff rate of 36 percent. Read more › July 31 🇲🇽 Mexico was granted a 90 day extension to try and reach a trade deal, Mr. Trump said after having a phone call with President Claudia Sheinbaum of Mexico. The agreement came on the eve of Mr. Trump's Aug. 1 tariff deadline. Read more › … later on July 31 🌎 The White House issued a long list of new tariffs hours before the Aug. 1 trade deadline. Switzerland will face a 39 percent tariff, while Syria, Laos and Myanmar will face rates of up to 41 percent. Read more › The new tariffs apply to dozens of nations and will take effect on Aug. 7. Most of those nations will face tariffs between 15 and 50 percent. Read more ›
