The US Postal Service (USPS) is temporarily suspending inbound international packages from China and Hong Kong, potentially delaying or blocking shipments from retailers such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu.
The package freeze highlights a wider challenge to globally minded businesses from incremental complications, which could be compounded if the US-China trade relationship worsens.
The USPS announcement rattled Asian markets, sending shares of Chinese e-commerce retailers down.
Photo: AFP
“There’s a more macro risk to the market now as all these seem to be an escalation of the trade war between the US and China,” Sydney-based AT Global Markets chief analyst Nick Twidale said. “I think we will see these micro issues from both sides increase.”
Shares of Alibaba Group Holding Ltd (阿里巴巴集團) fell more than 2 percent in Hong Kong and JD.com Inc (京東) tumbled more than 5 percent before paring losses.
While it is not clear what prompted the USPS move, it comes after US President Donald Trump revoked a de minimis rule for China, which previously allowed small packages under US$800 to enter the US duty-free. That exemption, often used by Chinese-linked e-commerce companies, was removed as part of a new 10 percent tariff on goods from China and Hong Kong, which took effect just after midnight on Tuesday.
The de minimis revocation is a “significant challenge” for USPS in terms of sorting out how to execute the new tariff rules, Morningstar senior equity analyst Chelsey Tam said. “There were 4 million de minimis packages per day in 2024, and it is difficult to check all the packages.”
The USPS restriction might have a more limited impact than it would have years ago, as many companies have moved away from USPS for international shipping, analysts said.
Letters and flat mail from China and Hong Kong would not be affected, USPS said in a statement on its Web site.
Washington is cracking down on a loophole that retailers such as Temu and Shein have used for years to expand in the US, allowing them to ship high volumes of small packages and gain an edge over competitors such as Amazon.com Inc.
Critics say that the flood of parcels from China is difficult to track and might contain illegal or dangerous goods.
The total volume of de minimis shipments into the US hit 1.4 billion packages in the last fiscal year, US Customs and Border Protection data shawed, about double the number in 2022.
Discount online retailers such as Temu and Shein contributed significantly to the spike in volume.
However, disruptions from the USPS move might more limited now than they would have been in previous years, as other operators have taken over the postal service’s role in handling cross-border lightweight e-commerce packages, including those from China, according to a US Office of Inspector General report in May 2023.
The amount of global mail USPS handles from all countries has dropped sharply.
USPS’ annual volume of inbound international mail declined to fewer than 200 million pieces in 2022 from more than 600 million pieces in 2017, the US Government Accountability Office said in a report last year.
Higher rates at USPS made United Parcel Service Inc, Federal Express Corp and other carriers more competitive and they absorbed the volume, the report said.
The move is “not good, but probably more symbolic,” Bloomberg Intelligence analyst Marvin Chen said, adding that most parcels would be delivered by private shippers.
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
RATIONING: The proposal would give the Trump administration ample leverage to negotiate investments in the US as it decides how many chips to give each country US officials are debating a new regulatory framework for exporting artificial intelligence (AI) chips and are considering requiring foreign nations to invest in US AI data centers or security guarantees as a condition for granting exports of 200,000 chips or more, according to a document seen by Reuters. The rules are not yet final and could change. They would be the first attempt to regulate the flow of AI chips to US allies and partners since US President Donald Trump’s administration said it rescinded its predecessor’s so-called AI diffusion rules. Those rules sought to keep a significant amount of AI
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
A new worry has been rippling across the stock market lately: Entire businesses, not just their employees, might be thrown out of work. While most economists say fears of an artificial intelligence (AI) job apocalypse are overblown, seismic shifts have happened in the past after big tech breakthroughs. The IT revolution of the 1990s led to a surge in productivity that sped up the US economy for several years. It also rendered companies or even industries largely redundant — from travel agents and stockbrokers to classified advertising and newspapers, or video rental stores. Economists expect AI would deliver higher productivity,
RSS