New China Tariffs, De Minimis Changes, and the USPS Suspension of Shipments

A Chaotic Week

A slew of announcements from the Trump administration has sent the logistics industry into a frenzy as retailers, shippers, and service providers try to analyze the impact on their business and determine if they need to make changes to their supply chain and logistics.

Mexico and Canada: The tariffs that didn’t happen.

Up until a few days ago, businesses were prepared for tariffs on Mexican and Canadian goods into the US. This also included the cessation of the duty-free de minimis for shipments valued at $800 USD or less for goods from both countries – popularly referred to as Section 321. Both countries also announced retaliatory tariffs against US imports into their countries. Then, with less than 24 hours to spare, both countries reached a temporary agreement with the Trump administration – effectively canceling the tariffs and the de minimis termination until March 4th, 2025, upon which the Trump administration will review if they are satisfied with the actions of the Mexican and Canadian governments.

China: Still in play.

The White House also announced a 10% additional tariff on all Chinese goods and a similar cessation of the de minimis. This effectively ends a long-standing misnomered “loophole” by which as many as 6M shipments per day from China were entering the US – with the biggest beneficiaries being Chinese retailers Shein and Temu.

China has responded by announcing 15% tariffs of its own against US coal and liquefied natural gas, and 10% on crude oil, agricultural machinery, and large engine cars starting Feb 10th.

In response to the changes, USPS has announced that it is temporarily suspending shipments from China Post and Hong Kong, effective immediately. This is presumably for them to find a suitable solution to clear those shipments.

What Retailers Need to Know

Tariffs are based on the Country of Origin (aka Manufacture) for the product and not on the Country of Export for the shipment. In other words, Chinese goods shipped to Canada or Singapore cannot avoid the higher tariffs or qualify for de minimis.

Shipments from China are not banned from entering the US. While Section 321 / Type 86 (T86) clearance is no longer available, shipments can still come in through T11 informal entry and T01 formal entry. Both methods require payment of duties and typically require much more detailed information, which will likely result in longer clearance times with the large volumes of shipments now coming through these channels.

US Customs and Border Protection (CBP) have announced that the new rules will apply based on arrival date, meaning anything arriving Feb 6th and afterward cannot utilize Section 321 / T86 and will have tariffs applied.

What Shippers Should Do

While shipments from China Post and Hong Kong Post to USPS are temporarily suspended, the majority of cross-border shipments from China to the US were not handled by postal services to begin with. The majority of non-postal carriers and service providers have been aware of the potential changes for months, and the majority are prepared for this scenario and have made provisions well in advance.

For those AfterShip customers who want to know who AfterShip recommends with respect to shipping parcels from China or Hong Kong, please reach out to your Customer Success Manager, or anyone from the logistics partnerships for advice. Be prepared, however, to pay the extra duties and taxes associated with your respective product.

Shipping goods in bulk from China to the US is a medium-term solution, albeit with higher tariffs in effect. It should only take 3-6 weeks for you to arrange a departure. If you need freight forwarding contacts, or parcel carriers that also offer freight forwarding, again feel free to reach out to AfterShip.

Longer term, consider having the option to manufacture in other countries, and for those who rely only on the US market, consider expanding into new markets as well. The lesson from all of this is that you should never put all your eggs in one basket. A good supply chain is a resilient one, and a resilient one is not necessarily the cheapest one, but the one with the highest agility.