Shoppers carry bags with promotional merchandise as they visit fashion retailer Shein's Christmas bus tour, in Manchester, Britain, Dec. 13, 2024. Reuters-Yonhap
China's cross-border merchants and logistics service providers are contending with the chaos caused by U.S. President Donald Trump's back-and-forth tariff policies, as businesses brace for more shocks in an already challenging retail market.
Garments producer and online seller Kenny Li said he tried to keep his cool after Trump earlier this month raised tariffs on Chinese goods by 10 percent and removed a duty exemption on lower-value packages, only to delay implementing the policies several days later.
"Just let it be — otherwise, what else can be done?" Li said. "We can only wait for the plan to be finalized and actually put in place before knowing for sure how we can deal with the policy changes."
For now, the mantra is "keep calm and carry on". Li continued to deliver his goods to the warehouses of e-commerce platforms Temu and Shein, both of which gave him no new instructions on how to cope with new U.S. policies. Logistics procedures and charges remained largely unchanged, he said.
Trump on Feb. 7 signed an executive order postponing new tariffs on lower-value packages from China, stipulating that the "de minimis" exemption will be removed only when the commerce secretary informs him that "adequate systems are in place to fully and expediently process and collect tariff revenue applicable".
It followed an announcement by the United States Postal Service that it would continue to accept all inbound mail and packages from mainland China and Hong Kong, reversing a decision half a day earlier to suspend such services.
In turn, many logistics service providers cancelled the extra fees they imposed after Trump first announced the tariffs — some companies had been charging 35 percent more for textile shipments and 25 percent more for other merchandise to cover duties and customs clearance.
This photo taken on June 11, 2024 shows workers producing garments at a textile factory that supplies clothes to fast fashion e-commerce company Shein in Guangzhou in southern China's Guangdong province. AFP-Yonhap
YunExpress, a Shenzhen-based cross-border logistics service provider, announced on Feb. 8 that it would fully refund the 30 percent tariff deposit and the 20 yuan ($2.70) customs clearance fee for all deliveries placed that week.
"The frequent adjustments to the U.S. customs clearance policies in the past seven days have brought chaos to the cross-border e-commerce supply chain, along with drastic fluctuations in costs," the company said in a notice. "We urge our seller friends to enhance their ability to promptly respond to the tightening policies and rapid changes."
The de minimis policy, which allows small packages worth less than $800 to enter the U.S. duty-free, has played a major role in driving the growth of the Chinese cross-border e-commerce industry. Nearly half of all packages shipped under de minimis came from China, the U.S. congressional committee on China said in a report in June 2023.
Removing the exemption means that goods from Temu, Shein and other Chinese-backed cross-border e-commerce players will be subject to U.S. duties on Chinese imports, which already stood at more than 20 percent in some industries.
Despite the reprieve, the threat of higher tariffs still looms over the cross-border e-commerce sector, which has become a key part of China's lucrative export sector.
Li said the new U.S. tariffs had made him more determined than ever to leave this industry, as he expected the policies to eat into the already thin profit margins of selling cheap products on sites like Shein and Temu.
"They will only make things harder for the industry this year," he said.
Read the full story at SCMP.