US Postal Service Suspends Inbound Parcels From China, Hong Kong

Yahoo

05-02-2025

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The US Postal Service is temporarily suspending inbound international packages from China and Hong Kong Posts, potentially delaying or blocking shipments from retailers like Shein and PDD Holdings Inc.'s Temu.
The package freeze highlights a wider challenge to globally-minded businesses from incremental complications, which could be compounded if the US-China trade relationship worsens. The USPS announcement rattled Asian markets, sending shares of Chinese e-commerce retailers down.
'There's a more macro risk to the market now as all these seem to be an escalation of the trade war between the US and China,' said Nick Twidale, chief analyst at AT Global Markets in Sydney. 'I think we we will see these micro issues from both sides increase.'
Shares of Alibaba Group Holding Ltd. fell more than 2% in Hong Kong and JD.com Inc. tumbled more than 5% before paring losses. Both companies, as well as Temu, Shein and Amazon, did not immediately respond to requests for comment.
While it's not clear what prompted the USPS move, it comes after President Donald Trump revoked a 'de minimis' rule for China, which previously allowed small packages under $800 to enter the US duty-free. This exemption, often used by Chinese-linked e-commerce companies, was removed as part of a new 10% tariff on goods from China and Hong Kong, which took effect just after midnight Tuesday Washington time.
The de minimis revocation is a 'significant challenge' for USPS in terms of sorting out how to execute the new tariff rules, said Chelsey Tam, senior equity analyst at Morningstar. 'There were 4 million de minimis packages per day in 2024, and it is difficult to check all the packages.'
Small Packages
The USPS restriction may have a more limited impact than it would have years ago, as many companies have moved away from USPS in recent years for international shipping, according to analysts.
USPS said letters and flat mail from China and Hong Kong would not be affected, according to a statement on its website.
A USPS spokesperson declined to comment beyond the announcement, including whether it was related to the order. The White House didn't immediately respond to a request for comment.
Meanwhile, Macau will suspend the postal services of small parcels and packages sent by surface mail to the US starting from Wednesday, local media Teledifusão de Macau reported, citing Macau Post and Telecommunications Bureau.
Washington is cracking down on a loophole that retailers like Temu and Shein have used for years to expand in the US, allowing them to ship high volumes of small packages and gain an edge over competitors like Amazon.com Inc. Critics say the flood of parcels from China is difficult to track and may contain illegal or dangerous goods.
The total volume of de minimis shipments into the US hit 1.4 billion packages in fiscal year 2024, according to US Customs and Border Protection, about double the number in 2022. Discount online retailers like Temu and Shein contributed significantly to the spike in volume.
However, disruptions from the USPS move may be more limited now than they would have been in previous years, as other operators have taken over the postal service's role in handling cross-border lightweight e-commerce packages, including those from China, according to a US Office of Inspector General report in May 2023.
'More Symbolic'
The amount of global mail USPS handles from all countries has dropped sharply in recent years. USPS's annual volume of inbound international mail declined to fewer than 200 million pieces in 2022 from more than 600 million pieces in 2017, according to a 2024 report by the Government Accountability Office. Higher rates at USPS made UPS, FedEx and other carriers more competitive and they absorbed the volume, according to the report.
The move is 'not good, but probably more symbolic,' Bloomberg Intelligence analyst Marvin Chen said, adding that most parcels would be delivered by private shippers.
US officials have alleged that parcel mail, direct from China and via third-party countries, is a gateway for illicit drugs, including deadly fentanyl.
'What the cartels in China have done is exploit that loophole to smuggle in not just fentanyl but all sorts of drugs,' White House trade adviser Peter Navarro told Politico at an event in Washington on Tuesday.
The China tariff order took effect even as two others, for Mexico and Canada, were put on hold. Trump has hinted at a possible call with Chinese leadership this week, though details remain unclear.
The White House has not ruled out a deal to pause the tariffs, which could also impact the Postal Service's ban, though nothing has been confirmed yet.
--With assistance from Spencer Soper, Winnie Hsu, Claire Che, Luz Ding, Josh Xiao, Daniela Wei, James Mayger, Jinshan Hong, Audrey Wan, Newley Purnell, Debby Wu, Danny Lee and Foster Wong.
(Adds Macau suspending surface mail to US in 10th paragraph.)
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