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Time of India
8 hours ago
- Business
- Time of India
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 USD 1 billion in May, the least since early 2023, according to customs data released Friday. The 40 per cent 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. '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.' For the entrepreneur, the new tariffs and logistical fees of direct shipping now would mean losing USD 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 (USD 13,800) for inventory and storage. The source of the disruption is the end of the 'de minimis' rule exemption for Chinese and Hong Kong shipments. Previously, packages valued under USD 800 could enter the US duty-free. Since May 2, those parcels face tariffs as high as 54 per cent 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 USD 700 million worth of such shipments last month. Globally, small parcel shipments rose 40 per cent in May compared to a year ago, with Belgium, South Korea, Hong Kong and Hungary among other large destinations.
Bloomberg
15-05-2025
- Business
- Bloomberg
Shein Lowers Prices to Lure Back US Shoppers After Tariff Cut
Shein Group Ltd. lowered US retail prices this week after the Trump administration temporarily cut duties on Chinese imports, as the online fashion retailer moves to win back consumers scared away by recent tariff-induced price hikes. The average cost of 98 products consistently tracked by Bloomberg News on Shein's website was $5.56 on Wednesday, down about 13% from a May 7 peak of $6.38.
Toronto Sun
03-05-2025
- Business
- Toronto Sun
Young Americans sour on Trump's China tariffs despite election-year bump
Published May 03, 2025 • 5 minute read A Shein Group Ltd. pop-up store inside a Forever-21 store in the Times Square neighborhood of New York. Photo by Yuki Iwamura / Bloomberg President Donald Trump's escalating tariff feud with China is threatening to upend the lives of young Americans who have grown accustomed to fast fashion, TikTok videos and playing XBox. This advertisement has not loaded yet, but your article continues below. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Don't have an account? Create Account Those perks were the result of close trade relations between the world's two largest economies and now threaten a perfect storm for young consumers already under the stress of inflation and new entering financial independence. For Republicans — who just enjoyed their best performance with young voters in a generation — the trade war is poised to reverse gains with a demographic that could be key to maintaining control of Congress in the midterm elections. 'Everybody is mad,' said Chelsea Hollins, a 26-year-old content creator and college student based in Detroit. 'That's all that I see on my timeline.' Trump's inability thus far to compel China to the negotiating table is already having dramatic consequences. Many goods imported from China now face a 145% tariff, while cheap items from Temu and fast-fashion brands are no longer eligible for the 'de minimis' exemption on low-priced shipped goods that allowed for bargain-basement prices for trendy clothes. This advertisement has not loaded yet, but your article continues below. The tensions are also toying with the fate of the social video app TikTok, which was nearing a deal to remain available in the U.S. before Trump's tariffs soured discussions. Now, frustrations are setting in for young Americans who played a critical role in Trump's election victory, helping him to secure the best performance for any Republican presidential candidate in two decades with voters under 30. Last month, 57% of Americans between 18 and 29 said they disapproved of Trump's handling of his job as commander-in-chief, a 14-point decline since Trump took office and the sharpest compared to other age brackets, a YouGov/Economist poll. Although the White House could still change course on its tariffs, the levies on China could have lasting political consequences for the GOP in next year's congressional midterms. Between 2020 and 2024, Trump made massive inroads with young voters, improving his share of the youth vote by 14% in North Carolina, 15% in Wisconsin, and 18% in Pennsylvania, according to Edison Research exit polls. In Michigan, Trump even tied former Vice President Kamala Harris among voters 18-to-29 years old. Your noon-hour look at what's happening in Toronto and beyond. By signing up you consent to receive the above newsletter from Postmedia Network Inc. Please try again This advertisement has not loaded yet, but your article continues below. But those results yielded Republicans only the narrowest of majorities in the House of Representatives. Now, young voters are worried that Trump's trade efforts are reshaping the economy in a way that hurts them. 'All Aspects' Hollins, who is studying communications at Wayne State University, says tariffs are impacting costs 'in all aspects' of her life, including price increases from her cellphone provider, electricity company and her favourite online clothing store. She almost exclusively shops for clothes on Shein, the Chinese company where she purchases hauls of new outfits seasonally and frequently shares them with her social-media followers. 'That's really the only place that I get clothes from at this point,' she said, adding that she buys other household items from the website, too. 'I won't feel like I can be creative in my fashion anymore.' This advertisement has not loaded yet, but your article continues below. Similar to other young Americans, Hollins finds shopping malls have become less valuable, offering a smaller selection of clothing at more expensive prices. Several affordable retailers have gone out of business or decreased their brick-and-mortar footprints as a result of the changes in consumer behaviour. For those preferring at-home entertainment, Microsoft Corp. announced it would raise prices on its XBox devices, which are manufactured in China, by as much as $100 for one console model in the wake of tariffs. Nintendo Co Ltd. delayed pre-orders of its new Switch console because of the new tariff impacts. Young Americans who have built virtual businesses are also feeling the pinch. Chelsey Brown, a 32-year-old who owns a home goods company, took out her first loan to ease the costs of the administration's tariffs on China, where some of her most popular products are custom made. This advertisement has not loaded yet, but your article continues below. With a mid-to-low profit margin, fronting the costs of tariffs will be unsustainable. 'We obviously cannot afford a 145% tariff,' she said, noting that she has two full-time employees along with contractors. 'Truly, I don't know what to do.' Brown, known online as the 'heirloom hunter' for her discoveries of lost family artifacts, has begun shifting her company's social media strategy away from TikTok to Instagram under the threat of a possible ban, despite half of her traction coming from the vertical video-app. 'It has done amazing things for my business,' she said of TikTok, adding that she surpassed over a million in sales last year without spending on ads. Courtship Continues Trump credits his strong performance with young voters, at least in part, to TikTok. If there is a sale that meets the requirements of a bipartisan divest-or-ban law, the White House would seriously consider making an account on TikTok, according to an administration official, who requested anonymity. This advertisement has not loaded yet, but your article continues below. While TikTok is banned on government devices, the White House continues to court millions of eyeballs online on other sites like X, Instagram and YouTube. White House Press Secretary Karoline Leavitt releases almost weekly vertical videos, optimized for smartphones, recapping the administration's moves. Trump's 17-year-old granddaughter, Kai Trump, has been vlogging from inside the Pennsylvania Avenue residence and on the road with the president. The 78-year-old president recently put her in front of cameras in a gaggle with reporters on Air Force One during a trip to Florida for a Ultimate Fighting Championship fight. Moderates Falter Still, young, independent voters moved from 'mildly pro-Trump' to 'sharply against him' in April, according to YouGov data analyst David Montgomery. Jacob Fox, a 22-year-old independent voter graduating with an economics degree at Hillsdale College, referred to Trump's stance on tariffs as 'extreme.' This advertisement has not loaded yet, but your article continues below. Despite supporting him in 2020, he declined to back Trump in November out of concern for how Trump's pledges on trade and immigration would impact the economy. 'I feel like I've been proven right,' he said. His peers, he added, are also anxious or struggling with their job search and grad school prospects amid fears of an economic downturn. 'That's been really hard to see,' he continued. Benjamin Rothove, a 20-year-old who chairs the College Republicans chapter at the University of Wisconsin-Madison, called Trump's initial tariff roll-out 'shockingly high' and 'kind of crazy.' Rothove, who said he voted for Trump but supported another Republican in the primaries, said Trump should 'move away from people like Peter Navarro,' a reference to a senior White House trade adviser who has been one of the staunchest proponents of tariffs in the administration. Still, most young Republicans remain loyal to Trump, according to Montgomery. Nick Gross, an 18-year-old college student living in Wisconsin who supports the president's agenda, says young people want 'instant gratification.' 'We want things to change overnight,' Gross added, urging patience with Trump's approach to revive domestic manufacturing through tariffs. 'That's the main reason why people need to give the president time.' Sunshine Girls Canada Toronto Maple Leafs Sunshine Girls Toronto & GTA
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Business Standard
02-05-2025
- Business
- Business Standard
As Trump closes China shipping loophole, prices to rise for US consumers
Trump last month signed an executive order closing a loophole that has allowed items from China and Hong Kong valued at no more than $800 to enter the US without customs declarations and import duties Bloomberg Small-value packages shipped to the US from China will no longer be exempted from tariffs starting Friday, when President Donald Trump's move against an exception he called a 'big scam' takes effect. The decision to end the so-called 'de minimis' exception is expected to have wide-ranging effects on American consumers who have increasingly purchased cheap clothing, household goods and other products from discount Chinese marketplaces such as Temu and Shein Group Ltd. It could also deal a heavy blow to independent online sellers who rely on Chinese imports. Trump last month signed an executive order closing a loophole that has allowed items from China and Hong Kong valued at no more than $800 to enter the US without customs declarations and import duties. The Trump administration has said it's taking aim at the de minimis exception because it could be exploited to send ingredients used to make illicit fentanyl into the US while avoiding detection by authorities. The US president also said the exemption has benefited Chinese e—commerce shopping platforms at the expense of US mom-and-pop retailers. 'De minimis. It's very — it's a big deal. It's a big scam going on against our country, against, really, small businesses and we've ended it,' Trump said Wednesday during a cabinet meeting. Packages from China and Hong Kong will now be taxed at a rate of 120% of their value or charged a flat rate. That fee starts at $100 and is set to increase to $200 on June 1. While Americans can still buy goods from places such as Temu and Shein, their costs will likely increase as retailers hike prices ahead of the tariffs. The change takes hold as Americans grow increasingly skeptical of Trump's economic agenda and tariff program. A disruption of shopping patterns could put further pressure on the White House to broker a deal with China to bring down trade barriers. Trump has acknowledged in recent days that American consumers are facing a new landscape due to his tariffs, saying that children may have 'two dolls instead of 30 dolls' to pick from on store shelves and 'maybe the two dolls will cost a couple of bucks more than they would normally.' Price hikes Shein has raised prices on products, from dresses to kitchenware, ahead of the new tariffs. As of Friday, the average price for the top 100 products in the beauty and health category increased by 51%, with several of the items more than doubling in price. Temu also appears to be passing all of the taxes on to consumers, more than doubling to cost of some products. The de minimis exemption, which dates back to 1938, is higher in the US than in other countries. It's about $40 in Canada and about $150 in the Euro area. Around 4 million small packages claiming the exemption entered the US each day in 2024. More than 1 billion individual shipments to the US a year claim the exemption, up from around 140 million a decade earlier, according to a 2024 White House fact sheet. De minimis packages from places other than mainland China and Hong Kong are poised to lose their tariff exemption too once a system to 'expeditiously process and collect' the duties is in place, according to an executive order issued by Trump. 'For us it makes a big difference because for a formal clearance into the United States, you need additional data items,' Meyer told Bloomberg Television on Wednesday, adding that companies are wondering if new forms will be needed for smaller packages.
Economic Times
02-05-2025
- Business
- Economic Times
De minimis ends: Consumers to pay the price as Trump kills 'big scam' that helped China's Shein, Temu
Synopsis De minimis US-China tariff: The US has ended the de minimis exception, imposing tariffs on small packages from China and Hong Kong, a move criticized by Trump as a "big scam." This decision is expected to raise prices for American consumers buying from platforms like Temu and Shein, and impact independent online sellers. The US will from Friday start imposing tariffs on small packages shipped from China, scrapping a long-standing exemption that America's President Donald Trump has called a 'big scam'. ADVERTISEMENT The decision to end the so-called 'de minimis' exception is expected to have wide-ranging effects on American consumers who have increasingly purchased cheap clothing, household goods and other products from discount Chinese marketplaces such as Temu and Shein Group Ltd. It could also deal a heavy blow to independent online sellers who rely on Chinese imports. How a US tax loophole supercharged China's exports Trump last month signed an executive order closing a loophole that has allowed items from China and Hong Kong valued at no more than $800 to enter the US without customs declarations and import duties. The Trump administration has said it's taking aim at the de minimis exception because it could be exploited to send ingredients used to make illicit fentanyl into the US while avoiding detection by authorities. As Trump moves to tax small parcels, some retailers give up on US The US president also said the exemption has benefited Chinese e-commerce shopping platforms at the expense of US mom-and-pop retailers. 'De minimis. It's very — it's a big deal. It's a big scam going on against our country, against, really, small businesses and we've ended it,' Trump said Wednesday during a cabinet meeting. Packages from China and Hong Kong will now be taxed at a rate of 120% of their value or charged a flat rate. That fee starts at $100 and is set to increase to $200 on June 1. While Americans can still buy goods from places such as Temu and Shein, their costs will likely increase as retailers hike prices ahead of the tariffs. ADVERTISEMENT The change takes hold as Americans grow increasingly skeptical of Trump's economic agenda and tariff programme. A disruption of shopping patterns could put further pressure on the White House to broker a deal with China to bring down trade barriers. Trump has acknowledged in recent days that American consumers are facing a new landscape due to his tariffs, saying that children may have 'two dolls instead of 30 dolls' to pick from on store shelves and 'maybe the two dolls will cost a couple of bucks more than they would normally.' ADVERTISEMENT The de minimis rule exempts low-value imports from customs duties and standard screening procedures. In the US, shipments under $800 qualify for duty-free treatment when sent directly to individual consumers. This is one of the most generous thresholds worldwide. Initially introduced in 1938 to reduce administrative burdens, the de minimis threshold was raised from $200 to $800 during former US President Barack Obama's tenure. This change facilitated a surge in small-value imports, particularly from e-commerce platforms. ADVERTISEMENT Trump's administration cited national security concerns as the primary driver behind suspending the de minimis exemption for China, along with Canada and Mexico. Platforms like Shein and PDD Holdings' Temu have benefited from the de minimis route by shipping low-value packages directly from China to US consumers without incurring tariffs. This competitive advantage has put pressure on American retailers. Blocking the de minimis route forces these companies to pay tariffs, levelling the playing field. ADVERTISEMENT In the past 10 years, the number of shipments entering the United States using the de minimis exemption has grown by more than 600%. It went from around 139 million shipments a year in fiscal year 2015 to over one billion by FY2023. In FY2024, this number rose again to more than 1.36 billion. This rapid increase had made it harder for U.S. Customs and Border Protection to properly enforce trade laws, health and safety standards, intellectual property rights, and consumer protection rules, according to U.S. Customs and Border Protection's website. Shein has raised prices on products, from dresses to kitchenware, ahead of the new tariffs. As of Friday, the average price for the top 100 products in the beauty and health category increased by 51%, with several of the items more than doubling in price. Temu also appears to be passing all of the taxes on to consumers, more than doubling the cost of some products. The de minimis exemption, which dates back to 1938, is higher in the US than in other countries. It's about $40 in Canada and about $150 in the Euro area. Around 4 million small packages claiming the exemption entered the US each day in 2024. More than 1 billion individual shipments to the US a year claim the exemption, up from around 140 million a decade earlier, according to a 2024 White House fact sheet. De minimis packages from places other than mainland China and Hong Kong are poised to lose their tariff exemption too once a system to 'expeditiously process and collect' the duties is in place, according to an executive order issued by Trump. DHL Group Chief Executive Officer Tobias Meyer said Wednesday that the impact of the de minimis change on the Bonn, Germany-based logistics company is uncertain and depends on how the 'fine print' is implemented. In particular, he said, it matters how 'formal versus informal customs clearances are defined.' 'For us it makes a big difference because for a formal clearance into the United States, you need additional data items,' Meyer told Bloomberg Television on Wednesday, adding that companies are wondering if new forms will be needed for smaller packages. (with Bloomberg inputs) (You can now subscribe to our Economic Times WhatsApp channel) (Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.) Download The Economic Times News App to get Daily International News Updates. NEXT STORY
