As Trump decrees ‘de minimis' exemption dead for China goods, what's the ‘bottom line'?
US President Donald Trump's elimination of the
'de minimis' exemption for Chinese goods will ultimately hurt American consumers, while Chinese cross-border e-commerce firms are facing a hit but could remain 'competitive' despite the harsher market conditions, according to analysts.
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Trump signed an executive order on Wednesday to remove the exemption, which previously allowed packages worth less than US$800 to enter the United States duty-free, following his
roll-out of 'reciprocal tariffs' targeting nearly all US trade partners, including a 34 per cent increase in import duties on Chinese goods.
Ending the exemption on May 2 would 'have a large impact on China's low-cost goods-selling platforms, such as Temu and Shein', said Bob Chen, director at Shenzhen-based venture capital firm Mangrove Capital. 'They either have to bear the cost or add it to the end price.'
But he noted how some of those Chinese firms are likely to remain competitive, given their low-cost advantage, as many sellers and supply chains are based in China.
'Even if they add the full extra cost to consumers, they are still competitive on price. And I don't think other platforms such as Amazon [could replace them],' Chen said.
03:19
Trump slaps 34% reciprocal tariffs on Chinese imports as part of 'Liberation Day' package
Trump slaps 34% reciprocal tariffs on Chinese imports as part of 'Liberation Day' package
The 'de minimis' exemption has
benefited China's cross-border e-commerce industry , with vendors sending small shipments directly to US consumers while avoiding US import duties and customs checks.
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