De Minimis Rule Revocation Shakes Up Global Logistics
The logistics industry is scrambling to adapt after President Donald Trump’s abrupt decision to revoke the de minimis rule for China, a policy shift that effectively removes the duty-free exemption for small parcels under $800. The new regulation, which took effect on February 4, 2025, is set to reshape global supply chains and intensify cost pressures on both businesses and consumers.
Chinese e-commerce giants, including Shein and Temu, have relied on this loophole to ship billions of dollars’ worth of goods to U.S. consumers at minimal cost. With the duty-free advantage gone, logistics firms and retailers alike are being forced to adjust pricing strategies to absorb the increased tariffs and regulatory complexities.
Immediate Fallout: Higher Costs and Market Uncertainty
The revocation has already led to widespread confusion among logistics firms and retailers. Many shipping companies in China have raised prices overnight, seeking to cushion the blow of increased duties. Industry estimates suggest that as much as $46 billion worth of U.S.-bound parcels originated from China last year, far surpassing the $23 billion officially reported.
The U.S. Postal Service briefly suspended accepting parcels from China and Hong Kong due to tariff uncertainties but has since resumed operations while working with U.S. Customs and Border Protection to implement new tariff collection mechanisms. FedEx continues to operate shipments between the U.S. and China, supporting customers as they navigate increased costs. UPS maintains its services into and out of China and Hong Kong, while DHL Asia Pacific has indicated that additional time and fees may be involved in sending items.
Chinese logistics providers have also implemented pricing adjustments. SF Express raised clearing fees and tariff deposits for U.S.-bound small parcels, imposing an additional clearing fee of 20 yuan (approximately $2.70) and a 30% tariff deposit based on the package’s weight. Industry experts note that around 1.36 billion shipments entered the U.S. under the de minimis provision in 2024, making the regulatory shift a significant disruption to global trade logistics.
The Ripple Effect on Retail and E-Commerce
Retailers on platforms like Shein and Temu are being forced to rethink pricing models as logistics agents impose an additional 30% levy on shipments. Many sellers were notified late on February 5 that they must pay an upfront deposit equal to 30% of the retail value of their goods, which will later be adjusted based on actual U.S. customs charges. This additional cost burden could make low-cost Chinese imports less competitive, potentially reshaping the U.S. e-commerce landscape.
Long-Term Implications for Supply Chains
Beyond immediate disruptions, Trump’s trade crackdown underscores the fragility of global supply chains and the risks of over-reliance on low-cost, high-volume shipping models. With logistics costs rising and regulatory scrutiny increasing, businesses may seek alternative supply chain strategies, such as nearshoring or diversifying sourcing beyond China.
For consumers, the short-term effect is likely to be higher prices on many imported goods, particularly in fast fashion and electronics. The long-term question is whether U.S. retailers and logistics firms can develop new solutions to maintain affordability while complying with the evolving trade landscape.
As the industry adjusts, all eyes will be on how China, logistics providers, and retailers respond to this shifting regulatory environment—and whether additional trade measures could further disrupt the flow of goods between the two economic powerhouses.
