GENEVA (Reuters) -An agreement between the United States and China to temporarily slash tariffs, announced on Monday, did not address what would happen to low-value “de minimis” ecommerce packages shipped from China to the U.S., a source briefed on the talks told Reuters.
On May 2, the administration of U.S. President Donald Trump ended the de minimis policy allowing packages worth less than $800 ordered online from China and Hong Kong to enter the United States duty free. It imposed tariffs of 120% on such parcels.
With the issue absent from Monday’s announcement, trade experts said the future of the policy was now unclear.
“There is no clarity on de minimis at all,” said Martin Palmer, co-founder of cross-border data provider Hurricane Modular Commerce.
“Logic says that if you cut tariffs for everything else, then it should mirror into de minimis [shipments] because that’s such a sizeable part of the imports into the U.S. from China.”
Shipping products duty-free from Chinese factories to American consumers had helped online retailers Temu and Shein surge in popularity, selling ultra-cheap gadgets, clothes, and accessories to the United States.
Shares in Temu owner PDD Holdings were up 7% on Monday after the announced cuts to tariffs. PDD and Shein did not immediately reply to a request for comment.
(Reporting by Olivia Le Poidevin and Helen Reid, additional reporting by Casey Hall; Editing by Emma Farge and Peter Graff)
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