U.S. Trade Policy Against China: Impacts on International Trade

The recent decision by the United States to revoke the "de minimis" tariff exemption for small packages and low-value items coming from China has raised serious concerns among experts. They warn that this move could disrupt the existing international trade order, negatively affect the burgeoning cross-border e-commerce sector, and ultimately harm U.S. consumers.

Industry analysts pointed out that to lessen the adverse effects stemming from increasing trade protectionism, Chinese online retailers operating in the cross-border realm need to focus on enhancing the setup of overseas warehouses. They should also work on localizing their supply chains and operations, and consider diversifying their market strategies to include emerging markets.

This discussion comes in light of the U.S. government halting the "de minimis" exemption. This exemption permits exporters to send packages valued at less than $800 to the U.S. without incurring tariffs. Alongside this, an additional 10 percent tariff has been announced on goods imported from China.

The U.S. Postal Service briefly suspended the acceptance of packages from China and Hong Kong, which could delay shipments from popular e-commerce platforms like Shein and Temu, along with other suppliers including Amazon. However, the Postal Service later announced that it would resume accepting packages from these regions.

Hong Yong, an associate research fellow at the Chinese Academy of International Trade and Economic Cooperation, expressed that the U.S.’s protectionist tactics will likely raise cross-border transaction costs while stalling technological growth and innovation in global e-commerce. This decision could particularly affect U.S. consumers, especially those in the lower-income bracket.

"Removing the de minimis tax exemption presents significant hurdles for Chinese cross-border online marketplaces. These platforms will have to rethink their pricing strategies and invest in local warehousing and logistics to lessen reliance on complicated cross-border transportation," Hong indicated.

In a related event, Foreign Ministry spokesperson Lin Jian addressed concerns over the U.S. Postal Service's suspension. He emphasized the necessity for the U.S. to refrain from using trade as a political tool and to stop targeting Chinese enterprises.

Many U.S. consumers appreciate the affordability and variety offered by companies like Shein and Temu, which ship a wide range of products including clothing, electronics, and accessories directly from their Chinese factories.

Zhu Keli, the founding director of the China Institute of New Economy, warned that the U.S.'s efforts to limit the influence of Chinese e-commerce platforms could disrupt the healthy evolution of the global e-commerce sector. This could create barriers to the free exchange of goods and services and contradict fundamental market economy principles, potentially hindering technological advancement and economic growth on a global scale.

The "de minimis" exemption has been in place since the 1930s, but its application has come under scrutiny, especially as the volume of shipments made under this provision has surged over 600 percent in the last decade, according to U.S. Customs and Border Protection.

Reports also indicate that the European Union is set to increase customs inspections on goods shipped by e-commerce retailers like Shein and Temu to consumers within the EU. New regulations will require these online marketplaces to provide more detailed information regarding packages bound for Europe to facilitate effective tracking and inspections.

In light of rising tariffs and strict regulations, Zhu stressed the importance for Chinese cross-border e-commerce platforms to broaden their reach into various markets, enhance the value of their products and services, and improve their global brand competitiveness.

trade, China, ecommerce