Trump’s On/Off China Tariffs Caused Parcels Backlog Chaos
The full scale of the crisis caused by President Trump's - now paused - suspension of de minimis exemptions for Chinese packages is now apparent, says the international delivery expert Parcelhero. There was widespread disruption to US Customs, parcel deliveries and e-commerce. It warns UK exporters should brace for another round.
During the first weekend in February, US President Donald Trump signed orders ditching the de minimis threshold on parcels arriving from China. This meant items valued at under £800 (around GBP635), which had previously not incurred any duties or taxes, were now liable. The change was implemented with just over 48 hours' notice and the result was Customs chaos, a temporary suspension of all US Postal Service (USPS) parcel deliveries from China and some hefty, unexpected bills for US consumers, says the international shipping expert Parcelhero.
As a result of the escalating mayhem, President Trump quietly signed an order on the following Wednesday to pause the de minimis suspension, which took effect on Friday 7 February. Even so, Parcelhero says the week-long confusion created issues that are still causing problems today and this is likely to be only a temporary reprieve while new measures are put into place. Parcelhero's Head of Consumer Research, David Jinks, a Member of the Chartered Institute of Logistics and Transport, says: 'President Trump's decision to use tariffs as a tool to achieve both economic and political objectives is undoubtedly disruptive to trade.
His decision to end the £800 de minimis threshold on packages from China has undoubtedly created the biggest disruption so far. The ensuing chaos revealed that tariffs are a complex weapon to wield and that the US needs to rethink how it integrates new tariffs with its Customs procedures. 'Customs at New York's JFK Airport had to put all packages from China on hold.
They were so backed up that even those goods on which duties had been paid became stuck, according to the US news agency Reuters. 'US Customs and Border Protection, which has the job of screening e-commerce packages and collecting duties on them, felt compelled to hold an emergency meeting with logistics professionals to discuss the status of more than a million packages reportedly piling up at JFK Airport as the new measures took effect. JFK handles around 60 million de minimis e-commerce packages annually.
'USPS parcel services were also severely impacted. It was forced to temporarily stop accepting packages from China and Hong Kong entirely as it sought to adapt to the new requirements. Around 4 million parcels arrive in the US every day and the sudden need to process them differently and collect new duties looks to have overloaded Customs and postal systems.
'Additionally, Chinese companies such as Shein and Temu halted some air cargo flights to America, invoking "force majeure" to cancel agreements without penalties. This meant delays for US shoppers waiting for items previously purchased from China. 'American consumers were also caught out by the new tariffs.
Reuters reports one online shopper who had placed a £197 order for 16 items - including dresses and baby clothes - from the Chinese e-commerce company Shein was told that the items would be returned to the sender if they did not pay £39.07 within five days of arrival. That charge included £20.76 in import duties, £1.31 in regulatory charges and £17 in duty tax processing. 'During the week-long disruption, many Americans did actually pay these duties before the de minimis threshold was reintroduced.
There is now debate over whether they should be refunded this money. 'The current suspension of Trump's new measures is unlikely to last long. His repeal stated that the ban on de minimis parcels from China will be reimposed "upon notification by the Secretary of Commerce to the President that adequate systems are in place to fully and expediently process and collect tariff revenue...".
'That is slight acknowledgement of the upheaval caused but still bodes ill for anyone looking to send packages to the US, including UK sellers. The eventual cancellation of de minimis means the more than 1 billion small-value e-commerce packages that arrive annually in the US directly from China will require additional information and duties, adding time and cost. Any resulting backlog and delays will likely have knock-on effects for UK e-commerce shipments to the US, even if President Trump decides (for now) to maintain the de minimis threshold for items purchased from UK-based sellers.
'Trump's aborted China changes are far from being his only planned tariff reforms. The UK Government has been caught on the hop by Trump's latest decision to potentially impose retaliatory tariffs on countries that place VAT on US goods. He is also considering a new, separate tariff on automobiles.
Previously, it had been thought that the US wouldn't foist new tariffs on UK products because the US and UK's trade balance is near parity.
'Whatever the outcome, we can expect some export and courier market volatility.
Live information on US courier services, including the latest on USPS restructuring and price changes, can be seen at https://www.parcelhero.com/en-gb/international-courier-services/usa-parcel-delivery
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