An agreement between the United States and China to temporarily reduce tariffs did not restore the exemption of “minimis” rights of the United States for China’s electronic commerce packages, but still provides online retailers like Shein and Temu a window to adapt their businesses.
Chinese companies, which have gained market share of dollar stores and rival shopping centers to be among the ten most downloaded applications in the United States, will probably use the 90 -day extension to make bulk shipments and replenish their US stores, trade experts said.
The government of President Donald Trump ended on May 2 to the Minimis policy that allowed packages with a value of less than $ 800 orders online from China and Hong Kong will enter the United States free of taxes.
The sending of tax -free products from Chinese factories to US consumers promoted the popularity of Temu and Shein, who sold ultra -unlocking devices, clothing and accessories to US buyers. His success promoted Amazon.com to create an imitator service, Amazon Haul, who also benefited from Minimis’s policy.
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The elimination of Minimis exposed these packages to high tariffs of up to 145% on most Chinese products, which endangered business models focused on low prices and took Shein and Temu to cut their advertising investment in the US and, instead addressing Europe. Amazon Haul launched last week in the United Kingdom and Saudi Arabia.
Since the minimis issue was not mentioned in Monday’s announcement, commercial experts said that the exemption did not seem to be returning. Even so, the reduction of 90 -day tariffs from 145% to 30% would help Shein and Temu to replenish their US stores to a lower cost.
“This is excellent for Shein and Temu, at least to replenish their inventory in the United States,” said Yao Jin, associate professor of supply chain management at the University of Miami, Ohio.
Instead of making individual shipments by plane, it is likely that Shein and Temu will send bulk products through a boring ship to the United States during the next 90 days to stock up before the next possible increase in tariffs, Jin said.
Owner of Temu, PDD Holdings, Shein and Amazon did not immediately respond to comments requests.
On its American website, Temu has presented products that are already found in American warehouses, as your business model changes and moves away from direct factory shipments to consumer. On May 2, Temu announced that all sales in the US are now managed by local vendors.
Before the elimination of minimis exemption, approximately 50% of air load shipments on the United States route were low -value electronic commerce, said Niall Van de Wouw, air loading director of the Xeneta price platform.
Since May 2, the general average daily cargo aircraft in that air corridor has fallen 39%, he added, citing data from the Rotate consultant.
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Hugo Pakula, an expert in Customs and executive director of the Tru Identity Commercial Automation Platform, said that Shein and Temu could send some products directly to consumers from China and others through mass shipments, depending on the price.
“There are some basic products with such a low value that you can add 30% to the sale price to the public, and still makes sense, since it would remain cheaper than in Amazon or any other place,” he said. “For a really cheap product, it is very possible that they continue (sending it) directly from China.”
For Amazon, the most recent commercial update can give time some external sellers to plan and expedite orders from China for the Christmas shopping season, although it was not clear how many merchants would take the opportunity.
With Reuters information
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