US tariff spike hits China's small parcels, squeezing exporters
US tariff hikes on small packages from China triggered a slump in shipments last month, contributing to a huge drop in bilateral trade and roiling
exporters
like
Shein Group Ltd
.
The value of small parcels sent from China to the US fell to just over $1 billion in May, the least since early 2023, according to customs data released Friday. The 40% plunge from the same month last year marks a sharp reversal for a booming trade route, coming just as the US government eliminated a long-standing tariff loophole.
The policy shift is upending the business models of fast-fashion titan Shein and its rival Temu, which relied on the exemption to send goods directly to US customers free of tariffs. It's also squeezing thousands of small merchants who relied on the model as a low-cost entry into the world's largest consumer market.
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
Unsold Container Homes in National Capital Region - Prices You Won't Believe!
Shipping Container Homes | Search Ads
Search Now
Undo
'Without the exemption, it would mean tougher business to us, and much fewer options for consumers, and potentially higher prices,' said Wang Yuhao, whose Kunming-based incense company, Shantivale, recently began selling to the US. 'This is a lose-lose situation.'
Bloomberg
For the entrepreneur, the new tariffs and logistical fees of direct shipping now would mean losing $2 on every parcel. To avoid the additional cost, Wang said he has pivoted to bulk shipments to US warehouses, a move that demanded an upfront investment of more than 100,000 yuan ($13,800) for inventory and storage.
Live Events
The source of the disruption is the end of the 'de minimis' rule exemption for Chinese and Hong Kong shipments. Previously, packages valued under $800 could enter the US duty-free. Since May 2, those parcels face tariffs as high as 54% after the Trump administration moved to close what it deemed an unfair trade loophole.
The impact on the largest players was swift. Shein raised US prices on items from dresses to kitchenware ahead of the hike to cover the costs of the higher tariffs, according to data compiled by Bloomberg News. In the week after the tariffs took effect, both Shein and Temu saw double-digit sales declines, an early sign the punitive measures are eroding their popularity.
Even with the drop, the US remained the largest single destination for China's small parcels, the data showed. Malaysia followed by taking more than $700 million worth of such shipments last month.
Globally, small parcel shipments rose 40% in May compared to a year ago, with Belgium, South Korea, Hong Kong and Hungary among other large destinations.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
4 minutes ago
- Time of India
Make yoga a lifestyle, it provides path of pure discipline, resilience, self-discovery: India Inc
India Inc leaders on Saturday gave a clarion call to make yoga a part of lifestyle, asserting that the 'precious gift from India' provides path of pure discipline, resilience, and endless self-discovery. On the International Day of Yoga , they took part in yoga sessions held in different parts of the country. In a post on social media platform X, Apollo Hospitals Group Joint Managing Director Sangita Reddy said she has been practising yoga for decades and "I'm still uncovering new truths!". by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo She further wrote, "The most profound? How deeply our breath is tied to our emotions. It's a game-changer: learn to control your breath, and you'll find you can navigate your emotional world. This path is pure discipline, resilience, and endless self-discovery. Happy Yoga Day!" Similarly, Jindal Steel and Power Chairman Naveen Jindal said, "Yoga is a precious gift from India - it is a discipline, a practice, and a way of life. Let's make yoga our lifestyle." Live Events Jindal, who is also a BJP Member of Parliament, said he did yoga in an event with yoga guru Ramdev, Haryana Governor Bandaru Dattatreya, Chief Minister Nayab Saini, Health Minister Arti Singh Rao and former minister Subhash Sudha along "with thousands of people on the sacred land of Brahmasarovar in the holy city of Kurukshetra and gave the message of spiritual peace and health". Indian Renewable Energy Development Agency Ltd (IREDA) Chairman & Managing Director, Pradip Kumar Das along with IREDA Director (Finance) Bijay Kumar Mohanty took part in the celebration of the 11th International Day of Yoga at Sunder Nursery here in the capital. Senior government officials, including Santosh Kumar Sarangi, Secretary, Ministry of New & Renewable Energy; Nidhi Khare, Secretary, Department of Consumer Affairs and Sanjeev Chopra, Secretary, Department of Food and Public Distribution also attended the event. Coal India arm Central Coalfields Ltd (CCL) said it organised large-scale celebrations across its operational areas, in line with this year's global theme: ' Yoga for One Earth, One Health ' and the national motto ' Yog Se Yogya'. Over 1,500 participants, including employees, villagers, and stakeholders, gathered for a collective yoga session at Piparwar area of Jharkhand, it said. Union Minister for Housing and Urban Affairs; and Minister of Power, Manohar Lal led a special yoga session at Jantar Mantar in which ministry officials also took part, promoting India's rich cultural heritage and underscoring the harmony between tradition and wellness. PTI
Time of India
14 minutes ago
- Time of India
ICICI Bank once wanted to acquire HDFC, Deepak Parekh spills the secret
Deepak Parekh revealed Chanda Kochhar's merger proposal between ICICI and HDFC, predating HDFC's reverse merger. Parekh cited regulatory pressure from the RBI as the primary driver for the HDFC-HDFC Bank merger, emphasizing the need for larger Indian banks. Post-merger, ICICI Bank has outperformed HDFC Bank in key metrics like profit growth and net interest margin. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Former HDFC chairman Deepak Parekh has revealed that former ICICI Bank chief Chanda Kochhar once proposed a merger between ICICI and HDFC, well before HDFC's reverse merger with its own banking a conversation with Kochhar on her YouTube channel, Parekh recounted, "I remember you talking to me once. I remember it very clearly. It's never been talked about in public, but I'm willing to share it now. You said that ICICI started HDFC. 'Why don't you come back home?' That was your offer."Parekh said he declined the offer at the time, saying it "won't be fair" or "proper with our name and the bank and all."Parekh described the eventual HDFC-HDFC Bank merger, completed in July 2023, as a move driven by regulatory compulsions rather than business ambition. The Reserve Bank of India had classified large NBFCs like HDFC, which then held assets exceeding ₹5 lakh crore, as systemically important — well above the ₹50,000-crore threshold."RBI supported us and they pushed us into it to some extent and they helped us," Parekh said. However, he added that there were "no concessions, no relief, no time, nothing."Parekh also said the deal had been executed with extreme confidentiality. 'It was kept a secret. No one knew about it—when it hit the press in the morning, that's when everyone found out. The government was aware because RBI was in touch with them, and we kept it so close—just lawyers, due diligence, accountants,' he on the conclusion of the merger, Parekh called it "a sad day and a happy day." He added, "It's good for the institution. It's good for the country to have large banks. Look at how large Chinese banks are. We have to be bigger, larger in India."On April 4, 2022, HDFC Bank announced its plan to acquire mortgage lender HDFC in a deal valued at about $40 billion, creating one of the largest financial institutions in Indian history. The merger gave rise to a banking entity worth $172 billion, affecting tens of millions of customers and shareholders across both companies, along with their group insurance and asset management said Indian banks must grow through acquisitions in order to become stronger in the also listed key concerns for chief executives, including continuing uncertainty in supply chains, trade policies, and export the insurance front, Parekh described it as the "least understood product" and criticised "mis-selling by banks" which, he said, was driven by the lure of high upfront HDFC Bank , in April this year, crossed the ₹15 lakh crore market capitalisation mark — an elite milestone — a quieter shift has been unfolding in the private banking space. ICICI Bank has steadily pulled ahead of HDFC Bank on several key performance Bank is now seen as a frontrunner among private sector lenders in India. HDFC Bank, meanwhile, has been navigating the after-effects of the 2023 merger, which have affected its growth FY25, ICICI Bank recorded profit growth of 15%, while HDFC Bank's profits rose by 11%. Both banks registered similar net interest income (NII) growth, but ICICI had a stronger net interest margin (NIM) of 4.41% compared with HDFC Bank's NIM of 3.65%.ICICI Bank also reported 14% growth in both advances and deposits for FY25. HDFC Bank, however, saw its advances grow at nearly half the pace of its merger added a substantial loan portfolio to HDFC Bank but did not bring in a matching level of deposits. This resulted in a spike in the loan-to-deposit ratio (LDR) to over 100% post-merger. Although HDFC Bank reduced this figure to 96.5% by the end of FY25, it still faces pressure to either increase deposits or slow down contrast, ICICI Bank's LDR stood at a healthier 82.4% as of March to the elevated LDR, HDFC Bank deliberately slowed down its credit expansion during FY25 to maintain balance. The bank's management believes that improving systemic liquidity will help raise deposits going forward.A high LDR suggests a bank is lending a large proportion of its deposits, which can become a risk if too many depositors withdraw funds at once and liquidity tightens.
Time of India
14 minutes ago
- Time of India
How Bill Gates and Melinda Gates reacted 'very differently' when their daughter announced her startup
Microsoft co-founder Bill Gates ' daughter Phoebe Gates launched an ecommerce app earlier this year. Phoebe co-founded the e-commerce app Phia with her former Stanford roommate Sophia Kianni. The platform uses AI to help users compare prices of new and second-hand products across more than 40,000 websites. A web browser/app, Phia aims to be the of fashion, offering an instant price comparison from thousands of e-commerce sites for any item, new or used. Phoebe Gates is the youngest child of Bill Gates and his ex-wife, Melinda French Gates. When she told her father that she and Ms. Kianni wanted to get into the e-commerce space, his reaction, he said, was 'Wow, a lot of people have tried, and there's some big guys in there.' However, he was reportedly worried she might ask for money. In an interview published by the New York Times, soon after Phia's web browser and app went live, Gates said: 'I thought, 'Oh boy, she's going to come and ask.' 'I would have kept her on a short leash and be doing business reviews, which I would have found tricky,' the businessman explained of his hesitance. 'And I probably would have been overly nice but wondered if it was the right thing to do.' by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Memperdagangkan CFD Emas dengan salah satu spread terendah? IC Markets Mendaftar Undo Bill Gates: Phoebe is the most different than I am Her mother Melinda Gates , who Phoebe calls her 'rock,' told her she had to raise the capital on her own. 'She saw it as a real opportunity for me to, like, learn and fail,' she said. Talking further about Phoebe, Gates said that among all her children, she is 'the most different than I am". "Because she's so good with people. When we would go on family vacations, we would find some part of the beach to just be off on our own, and Phoebe would go down the beach and meet people and bring them back to introduce them to us,' Gates explained. AI Masterclass for Students. Upskill Young Ones Today!– Join Now
