Business reporters, BBC News
Getty ImagesThe US Postal Service (USPS) said it has stopped accepting parcels from mainland China and Hong Kong until further notice.
The move comes after rules came into force in the US which closed a loophole that allowed small packages worth $800 (£641) or less to be sent to America without paying taxes or fees.
The US Postal Service said letters will not be affected by the suspension, but declined to offer a reason for the decision.
Chinese retailers, such as online giants Shein and Temu, have used the tax exemption to ship low value packages duty-free to the US and have benefitted from similar rules in the UK and the European Union to reach millions of customers.
The explosion of parcels being shipped under the loophole has prompted increased scrutiny in recent years. While all retailers use the exemption, those who sell fast-fashion and cheap goods have seen their sales soar.
On Wednesday, the EU – which has been exploring similar measures to the US – announced that Temu and Shein would be liable for the sale of unsafe and dangerous products on their platforms.
America’s change to stop low-value products being shipped tax-free under the so-called “de minimis” exemption was one of the trade measures outlined by President Donald Trump at the weekend.
He also announced an additional 10% tariff on all goods imported to the US from China.
The US Postal Service said letters will not be affected by the suspension, but declined to offer a reason for the decision.
In the EU, retailers benefit from paying no tax on parcels worth less than €150 (£124), a policy critics argue gives those firms an unfair advantage.
According to the European Commission, 4.6 billion low-value items worth below €22 were imported into the EU last year, 91% of which came from China – double that of 2023.
On Wednesday, the EU announced that it would increase customs checks on goods shipped directly by ecommerce retailers.
It also said it would coordinate a joint investigation by the Consumer Protection Cooperation (CPC) Network of national consumer authorities into Shein based on suspicions that the company infringes EU consumer protection rules.
Shein said it would engage with the consumer agencies and the EU so that consumers “can shop online with peace of mind”.
“We want to see a competitive e-commerce sector that keeps consumers safe, offers convenient products, and is respectful of the environment,” said EU tech chief Henna Virkkunen
In the US, close to half of all parcels entering the country under de minimis exemptions were sent from China, according to a 2023 report by US Congress.
Officials have pointed out that the large flow of parcels entering the country through this exemption made it increasingly difficult to screen them for possible illegal goods.
Changes to the tax exemption in the US under President Joe Biden were already in progress before Trump took office, but Trump has gone further to extend tariffs to all China goods being imported into the US, including fashion items and toys.
In response, China said it would hit back with its own levies and place PVH, the US company that owns designer brands Calvin Klein and Tommy Hilfiger, on its “unreliable entity” list for alleged “discriminatory measures against Chinese enterprises”.
Trump had been expected to speak to his Chinese counterpart Xi Jinping in the coming days but on Tuesday the US president said he was in “no rush” to hold talks.
Nick Stowe, chief executive of Monsoon & Accessorize, told the BBC’s Today programme he was in support of the changes in the US to the de minimis exemption, claiming that it had allowed major Chinese retailers to “undercut” rivals in other markets.
“It has long been a complaint of UK retailers, European retailers as well as the US retailers that Shein are exploiting this loophole, not paying customs duty and they have built a business at an industrial scale,” he said.
The BBC has contacted USPS, Shein and Temu for comment.
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