The US suspends tariff exemptions for small packages, affecting cross-border e-commerce

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Impact and Countermeasures of the US Elimination of Tariff Exemptions for Small Parcels Under $800

1. Core Policy Content

Eliminating the Duty-Free Threshold: Starting August 29, 2025, all imported parcels (including postal and non-postal channels) valued at less than $800 will no longer enjoy duty-free treatment and will be subject to a tariff of $78.

Tariff Collection Methods:

Postal parcels: Ad valorem (54% of the value) or specific tariff (US$100 per package) levied 8%.

Non-postal channels (DHL, FedEx, etc.): Direct tariffs levied at the applicable rate 2%.

Policy Background: The US claims this move is aimed at combating the influx of illicit goods (such as fentanyl) and protecting domestic industries, but in reality, it primarily targets Chinese cross-border e-commerce platforms such as Temu and Shein 7.

2. Key Affected Companies

Temu, Shein, and TikTok Shop: These platforms rely on a "low-cost direct mail + duty-free" model. The new regulations will increase costs by $80-200 per order, weakening their price advantage 25%.

Small and medium-sized cross-border e-commerce sellers: Profit margins on low-priced goods are being significantly squeezed, and some may be forced to exit the US market.

US consumers: Low-priced goods (such as $9.9 with free shipping) will disappear, and shopping costs will rise.

Logistics Industry: Postal parcel volume is expected to decline, while demand for overseas warehouses is surging.

3. Industry Impact Analysis

Rising Logistics Costs:

Direct mail parcel models are impacted, with an expected 20% decrease in cross-border e-commerce air freight demand between China and the US, and an 8% increase in overseas warehouse orders.

Some logistics providers have suspended the T86 customs clearance model, resulting in customs clearance delays.

Supply Chain Adjustments:

Overseas warehouse stocking is becoming a trend, but carries higher inventory risks.

Some companies are shifting to Mexico and Southeast Asia to set up factories to avoid high tariffs.

Platform Transformation:

Temu is accelerating its transition from "full-management" (platform responsible for logistics) to "partial-management" (sellers fulfill their own orders) to reduce the impact of tariffs.

Shein is expanding its local warehouse presence in Europe and the US to shorten delivery times.

4. Seller Response Strategies

Passing on Price Increases: Some Temu and Shein products have seen price increases of 20%-100%8.

Shifting to an Overseas Warehouse Model: Stocking inventory in US warehouses in advance to mitigate the impact of tariffs, but bearing inventory risk9.

Diversifying the Supply Chain:

Establishing factories in Mexico, Vietnam, and other locations to avoid high tariffs on China6.

Expanding into European and Southeast Asian markets to reduce dependence on the US5.

Branding and Premium Pricing Strategies: Increase product value-added and reduce reliance on low prices3.

Compliance-Based Operations: Avoid under-declarations, ensure accurate customs declarations, and reduce customs inspection risks9.

5. Future Trends

Cross-border e-commerce has entered an era of "three highs" (high barriers to entry, high costs, and high compliance), making the low-price dumping model unsustainable2.

Demand for overseas warehouses has surged, and the number of overseas warehouses in China is expected to exceed 3,000 by 20259.

The EU may follow suit: it has proposed imposing a €2 tariff on parcels under €150, primarily targeting Chinese e-commerce companies.11

Conclusion

The US's elimination of the tax-free policy for small packages will reshape the global cross-border e-commerce landscape, forcing companies to adjust their supply chains and improve product competitiveness. In the short term, price increases and logistics delays are unavoidable, but in the long term, branding and localized operations will become key survival strategies.