By Helen Reid
LONDON (Reuters) – The U.S. ended its tariff exemption on small parcels on Friday, with some retailers stopping selling to U.S. customers, while others seek temporary solutions in hopes that tariff rates can be lowered.
After the decision of US President Donald Trump last month, the “minimum” tax-free treatment for e-commerce packages was removed from products in China and Hong Kong – products originated from Chinese and Hong Kong, tariffs on most Chinese goods, tariffs on most Chinese goods, and tax-free treatment for e-commerce packages. The action subverted global trade and sparked revenge from Beijing.
The company said in a notice Wednesday that UK beauty product retailer Space NK has stopped e-commerce orders and shipped them to the U.S. “avoiding incorrect or paying additional fees for customer orders.”
This is not alone. A Vancouver-based company sells bras and lingerie in China, made in China, told customers in an Instagram post that it will no longer ship it to the U.S. due to tariffs, and said it will resume once it is clear.
“We will go from zero to 145%, which is really untenable for the company and untenable for the customers,” said Cindy Allen, CEO of Trade Force Multiplier, a global trade consulting firm.
“I see a lot of SMEs just opting to exit the market altogether,” she added.
Import costs may depend on shipping method. For goods processed by the U.S. Postal Service, the tariff will be 120% of its value, or $100 per pack. The amount will increase to $200 in June, according to U.S. Customs and Border Protection implementation guidelines.
Prices rise
Players willing to continue entering the U.S. market are forced to raise their price tags.
Managing Director Mike Branney said the U.S. price has risen by 20% compared to other markets, and further price increases may have to be considered due to higher tariffs.
Singapore-based fast fashion giant Shein tried to assure customers in an article on its Instagram account Thursday, saying: “Some products may be priced differently than before, but most of our collections are still as affordable as ever.” Shein sells clothes mainly made in China, and the United States is its largest market.
Temu, an international division of Chinese e-commerce giant PDD Holdings, has become famous in U.S. warehouses on its website, marked as “local” and the pop-up informed customers will have no import fees for local warehouse items.
