End of tariff exemption on small parcels forces retailers to halt sales to US due to high tariffs

From Yahoo Finance: 2025-05-02 01:09:00

Retailers are halting sales to the U.S. following the end of a tariff exemption on small parcels. Tariffs of 145% now apply to goods from China and Hong Kong. Companies like Space NK and Understance are pausing shipments. Prices are being raised by players like Oh Polly and Shein to cover higher tariffs.

Shein and Temu are adapting to the new tariffs by featuring products already in U.S. warehouses with no import charges. These companies have reduced digital advertising spending in preparation for the change. E-commerce businesses not prepared for the shift may struggle to sell to the U.S.

The end of the de minimis exemption for Chinese goods aims to reduce smuggling and counterfeit products. Sellers now need to provide detailed product information to U.S. customs, discouraging smaller retailers. UPS CEO noted many small businesses source goods solely from China. Etsy is helping sellers clarify the origin of their products to comply with tariffs.

Primark, a British retailer selling in the U.S. through physical stores, may benefit from the tariff change. With prices rising, some Americans may return to shopping centers for better value. The shift away from Chinese goods could boost retailers less reliant on e-commerce or Chinese manufacturing.



Read more at Yahoo Finance: As Trump moves to tax small parcels, some retailers give up on US