A U.S. Postal Service worker is proven loading parcels outdoors a submit workplace in Wheeling, In poor health., on Jan. 29, 2024.
Nam Y. Huh/AP
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Nam Y. Huh/AP
HONG KONG — People are prone to pay extra for merchandise from widespread Chinese language e-commerce platforms like Shein and Temu because the U.S. Postal Service mentioned it will cease accepting parcels from China and Hong Kong.
The transfer was introduced Tuesday, coming after the U.S. imposed an extra 10% tariff on Chinese language items and ended a customs exception that allowed small worth parcels to enter the U.S. with out paying tax. Canada and Mexico managed to barter a month-long reprieve from 25% tariffs threatened by U.S. President Donald Trump.
It’s going to seemingly influence on-line buying locations like Shein and Temu, widespread with youthful consumers within the U.S. for affordable clothes and different merchandise, normally shipped instantly from China.
Low-cost, direct postal service helps these corporations maintain prices low, as did the “de minimis” exemption that beforehand allowed shipments to go tax-free if their worth is beneath $800.
The momentary suspension by USPS is prone to delay shipments and will imply greater costs in the long run.
What precisely did the USPS announce?
The U.S. Postal Service mentioned in a discover that it will briefly cease accepting inbound parcels from the China and Hong Kong Posts till additional discover.
Letters and flats — mail that measures as much as 15 inches (38 centimeters) lengthy or 3/4 inches (1.9 centimeters) thick — should not affected.
Why did it occur?
The USPS didn’t state a cause in a short announcement, however the suspension got here after Trump closed the “de minimis” customs exemption this week that allowed consumers and importers to keep away from duties on packages price under $800.
The exemption was eliminated as a part of an government order to levy a ten% tariff on Chinese language items.
U.S. Customs and Border Safety beforehand said that it processes a median of over 4 million “de minimis” imports every week.
What’s the influence and who’s most affected?
Shoppers and firms alike will not have the ability to ship parcels to the U.S. from Hong Kong or China.
This transfer is prone to influence Chinese language e-commerce companies like Shein and Temu, though Shein is prone to be extra affected, in keeping with Jacob Cooke, CEO of e-commerce advertising and marketing company WPIC Advertising + Applied sciences.
Each corporations have vital market share within the U.S.
“Compared to Temu, Shein relies more heavily on USPS for direct-to-consumer shipping from China, and without this channel, it will have to rely more on private carriers,” mentioned Cooke.
“That will increase logistics costs, which along with the recent scrapping of the de minimis exemption for most products from China, could erode its price advantage.”
Cooke mentioned Temu operates on a semi-consignment mannequin and sometimes ships bulk orders to the U.S. earlier than fulfilling orders domestically.
“Temu’s model of sourcing low-cost goods should also enable the platform to absorb higher logistics costs and remain price competitive,” he mentioned.
Shein and Temu didn’t instantly remark.
Chinese language Overseas Ministry spokesperson Lin Jian mentioned China would take “necessary measures” to guard its corporations, and urged the U.S. to “stop politicizing economic and trade issues and using them as a tool, and to stop unreasonably suppressing Chinese companies.”
What are attainable methods for corporations to work across the problem?
It’s unclear how lengthy the USPS suspension will final, however the effort to crack down on the de minimis excemption looks as if a longer-term shift in coverage, Cooke mentioned.
“Shein and Temu will simply need to rely more on private carriers as a workaround to the USPS suspension,” he mentioned.
In the long run, Shein might speed up its warehouse enlargement within the U.S., whereas Temu can double down on its semi-consignment mannequin. By delivery in bulk to the U.S. and fulfilling orders domestically, logistics price may be diminished, Cooke mentioned.
“Shipping in bulk to the U.S. and fulfilling domestically can reduce logistics costs, but for Shein, this poses a longer-term disruption to their business model which has depended on rapidly developing new SKUs and shipping them directly to consumers,” Cooke mentioned.
