The United States will reduce its “de minimis” tariff on shipments from China to 54% from the previous rate of 120%.

This change, outlined in a White House executive order issued on May 13, 2025, will take effect on May 14, 2025. It includes a minimum flat fee of US$100.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ The evolving tariff landscape represents a partial de-escalation in US-China trade tensions

This tariff reduction from 120% to 54% signals a notable shift in the trajectory of the US-China trade war that began in 2018 when President Trump first imposed tariffs to address unfair trade practices and intellectual property theft 1.

By 2025, tariffs had escalated dramatically, with the US imposing a 145% tariff on Chinese goods and China retaliating with a 125% tariff on US goods, representing the peak of trade hostilities 1.

The current reduction, while still maintaining substantial tariffs with a $100 minimum fee, suggests a calibrated approach rather than a complete reversal of trade policy, potentially responding to economic pressures on both sides.

This change comes amid a complex economic relationship where both nations have sought to stabilize trade ties while maintaining leverage, with previous agreements like the 2020 phase-one deal falling short of expectations when China failed to meet commitments to purchase $200 billion in US goods 1.

2️⃣ The de minimis policy change disproportionately affects low-income consumers and e-commerce giants

The elimination of the de minimis exemption on May 2, 2025, marked a significant shift in US import policy, ending a provision that previously allowed packages valued under $800 to enter duty-free, a threshold far more generous than most countries 2.

Research indicates that 73% of shipments to low-income zip codes fell under the de minimis exemption, making these communities particularly vulnerable to price increases, with potential costs reaching up to $136 annually per consumer 3.

The economic impact is substantial considering that over 80% of US e-commerce shipments in 2022 were de minimis imports, with the total value of goods entering under this exemption reaching $64.6 billion in 2024 4 3.

E-commerce platforms heavily reliant on this exemption, particularly Chinese retailers like Shein and Temu, have already begun raising prices in response to the policy change, fundamentally altering the economics of their business models that previously relied on direct-to-consumer shipments from China 4 5.

3️⃣ Logistical and administrative challenges create new trade friction

The implementation of new tariff structures has created significant operational hurdles for US Customs and Border Protection, which now faces the monumental task of inspecting and processing millions of additional packages that previously entered without scrutiny 4.