USPS has suspended parcels from Hong Kong and China. Here’s what it means for Shein and Temu

By ZEN SOO, Associated Press Business Writer

HONG KONG (AP) — Americans are apt to wage much for products from fashionable Chinese e-commerce platforms similar Shein and Temu arsenic the U.S. Postal Service said it would halt accepting parcels from China and Hong Kong.

The determination was announced Tuesday, coming aft the U.S. imposed an further 10% tariff connected Chinese goods and ended a customs exception that allowed tiny worth parcels to participate the U.S. without paying tax. Canada and Mexico managed to negociate a month-long reprieve from 25% tariffs threatened by U.S. President Donald Trump.

It volition apt interaction online buying destinations similar Shein and Temu, fashionable with younger shoppers successful the U.S. for inexpensive covering and different products, usually shipped straight from China.

Cheap, nonstop postal work helps these companies support costs low, arsenic did the “de minimis” exemption that antecedently allowed shipments to spell tax-free if their worth is nether $800.

The impermanent suspension by USPS is apt to hold shipments and could mean higher prices successful the agelong term.

What precisely did the USPS announce?

The U.S. Postal Service said successful a announcement that it would temporarily halt accepting inbound parcels from the China and Hong Kong Posts until further notice.

Letters and flats — message that measures up to 15 inches (38 centimeters) agelong oregon 3/4 inches (1.9 centimeters) heavy — are not affected.

Why did it happen?

The USPS did not authorities a crushed successful a little announcement, but the suspension came aft Trump closed the “de minimis” customs exemption this week that allowed shoppers and importers to debar duties connected packages worthy beneath $800.

The exemption was removed arsenic portion of an enforcement bid to levy a 10% tariff connected Chinese goods.

U.S. Customs and Border Protection antecedently stated that it processes an mean of implicit 4 cardinal “de minimis” imports each week.

What is the interaction and who is astir affected?

Consumers and companies alike volition nary longer beryllium capable to nonstop parcels to the U.S. from Hong Kong oregon China.

This determination is apt to interaction Chinese e-commerce firms similar Shein and Temu, though Shein is apt to beryllium much affected, according to Jacob Cooke, CEO of e-commerce selling bureau WPIC Marketing + Technologies.

Both companies person important marketplace stock successful the U.S.

“Compared to Temu, Shein relies much heavy connected USPS for direct-to-consumer shipping from China, and without this channel, it volition person to trust much connected backstage carriers,” said Cooke.

“That volition summation logistics costs, which on with the caller scrapping of the de minimis exemption for astir products from China, could erode its terms advantage.”

Cooke said Temu operates connected a semi-consignment exemplary and often ships bulk orders to the U.S. earlier fulfilling orders domestically.

“Temu’s exemplary of sourcing low-cost goods should besides alteration the level to sorb higher logistics costs and stay terms competitive,” helium said.

Shein and Temu did not instantly comment.

Chinese Foreign Ministry spokesperson Lin Jian said China would instrumentality “necessary measures” to support its companies, and urged the U.S. to “stop politicizing economical and commercialized issues and utilizing them arsenic a tool, and to halt unreasonably suppressing Chinese companies.”

What are imaginable ways for companies to enactment astir the issue?

It is unclear however agelong the USPS suspension volition last, but the effort to ace down connected the de minimis excemption seems similar a longer-term displacement successful policy, Cooke said.

“Shein and Temu volition simply request to trust much connected backstage carriers arsenic a workaround to the USPS suspension,” helium said.

In the agelong term, Shein could accelerate its warehouse enlargement successful the U.S., portion Temu tin treble down connected its semi-consignment model. By shipping successful bulk to the U.S. and fulfilling orders domestically, logistics outgo tin beryllium reduced, Cooke said.

“Shipping successful bulk to the U.S. and fulfilling domestically tin trim logistics costs, but for Shein, this poses a longer-term disruption to their concern exemplary which has depended connected rapidly processing caller SKUs and shipping them straight to consumers,” Cooke said.