The US is to cut the low value de minimis tariff on China shipments, a White House executive order said on Monday, further de-escalating a potentially damaging trade war between the world’s two largest economies.
The tariff relief comes in the wake of Beijing and Washington announcing a truce in their trade spat after weekend talks in Geneva, Switzerland, with both sides agreeing to unwind most of the tariffs imposed on each other’s goods since early last month.
The Geneva agreement slashed tariffs for the US and China by 115 percentage points each, to 10 percent and 30 percent respectively, for at least 90 days.
Photo: Reuters
While their joint statement in Geneva did not mention the de minimis duties, the White House order released later said the levies would be reduced to 54 percent from 120 percent, with a flat fee of US$100 to remain, starting from today.
De minimis — a legal term referring to matters of little importance, which describes the US waiver of standard customs procedures and tariffs — was one of the most generous exemptions in the world: For example, the EU de minimis threshold is 150 euros (US$167).
The de minimis exemption, for items valued at up to US$800 and sent from China through postal services, were previously able to enter the US duty free and with minimal inspections.
In February, US President Donald Trump ended the de minimis exemption by imposing a tax of 120 percent of the package’s value or a planned flat fee of US$200 — set to come into effect by next month — blaming it for being heavily used by companies such as Shein (希音), Temu and other e-commerce firms, as well as traffickers of fentanyl and other illicit goods.
The number of shipments entering the US through the tax-free channel exploded in the past few years with more than 90 percent of all packages coming via de minimis. Of those, about 60 percent came from China, led by direct-to-consumer retailers such as Temu and Shein.
In Monday’s order, the White House said the reduced tariffs were to take effect by 12:01am today.
The plan for a US$200 flat fee duty rate would also be shelved, it said, keeping it at US$100.
China exported US$240 billion in direct-to-consumer goods benefiting from de minimis worldwide last year, accounting for 7 percent of its overseas sales and contributing 1.3 percent of GDP, Nomura Holdings Inc’s estimates showed.
Separately, China has removed a ban on airlines taking delivery of Boeing Co planes in the wake of the Geneva trade deal, Bloomberg News reported yesterday, citing sources familiar with the matter.
Officials in Beijing have started to tell domestic carriers and government agencies this week that deliveries of aircraft made in the US can resume, Bloomberg said.
While the lifting of the ban clears the way for deliveries to restart, it is unclear how soon China’s carriers can get the planes they need, and the restoration of jet deliveries could be short-lived if the tariff war is not resolved during the three-month reprieve.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
Alchip Technologies Ltd (世芯), an application-specific integrated circuit (ASIC) designer specializing in server chips, expects revenue to decline this year due to sagging demand for 5-nanometer artificial intelligence (AI) chips from a North America-based major customer, a company executive said yesterday. That would be the first contraction in revenue for Alchip as it has been enjoying strong revenue growth over the past few years, benefiting from cloud-service providers’ moves to reduce dependence on Nvidia Corp’s expensive AI chips by building their own AI accelerator by outsourcing chip design. The 5-nanometer chip was supposed to be a new growth engine as the lifecycle
RSS