Washington D.C., May 13, 2025 — President Donald Trump has announced a dramatic reduction in tariffs on small parcels from China and Hong Kong, a move that gives a major boost to Chinese e-commerce giants Shein and Temu. The announcement came just hours after the U.S. and China agreed to a 90-day trade détente, aimed at cooling tensions between the world’s two largest economies.
Tariffs on Small Parcels Slashed
According to a White House statement, new tariffs on small packages worth up to $800 have been cut from 120% to 54%. The previously scheduled flat rate increase to $200 per item, set to go into effect on June 1, has been cancelled. Instead, a $100 fee per item will remain in place for packages shipped after May 2.
Shein and Temu, two of China’s biggest fast-fashion and budget retail platforms, had been hit hard earlier this month when the Trump administration closed the “de minimis” loophole—a rule that allowed low-value packages to enter the U.S. duty-free. Shoppers rushed to complete their purchases before the exemption expired.
Temporary Trade Truce Between U.S. and China
The tariff rollback is part of a broader agreement between Washington and Beijing to ease mutual levies for 90 days and resume trade talks. Under this temporary deal:
- U.S. tariffs on Chinese goods drop from 145% to 30%
- China’s retaliatory tariffs on U.S. imports fall from 125% to 10%
- Negotiations will continue with a review due at the end of the 90-day period
“We’re not looking to hurt China,” Trump said. “But they were being hurt very badly. This is a total reset.” He added that he expected to speak directly with President Xi Jinping “maybe at the end of the week.” Source: BBC News
Winners: E-commerce Giants and U.S. Shoppers
The immediate beneficiaries of this policy shift are Chinese e-commerce platforms like Shein and Temu, which rely heavily on the volume of low-cost, direct-to-consumer shipping. Analysts predict this move could revive order volumes that slumped after the earlier tariff hike in early May.
For U.S. consumers, this means more affordable access to ultra-low-cost products. Fashion shoppers and bargain hunters are expected to benefit the most. Meanwhile, U.S. small businesses and traditional retailers remain wary, fearing an uneven playing field. More context on this can be found at Brookings Institution.
Background: The De Minimis Rule and U.S. Concerns
The de minimis rule allows packages valued under $800 to enter the U.S. without tariffs or taxes. Critics have argued that companies like Shein and Temu exploited this loophole, flooding the U.S. with goods while avoiding duties and customs inspections. In early 2025, the Trump administration had shut down the exemption in an effort to protect American manufacturers and retailers. Background via U.S. Customs and Border Protection.
The new revision reintroduces lighter duties—but not a full exemption—effectively striking a balance between trade enforcement and consumer affordability.
What Comes Next?
The tariff reductions are temporary and contingent on the success of ongoing trade negotiations. Trump clarified that “some levies have been suspended, not cancelled,” and could be reinstated in three months if no agreement is reached. Still, the news helped buoy financial markets, with the S&P 500 and Nasdaq both posting solid gains on Monday. Market reaction reported via CNBC.
Conclusion
Trump’s move to slash tariffs on small Chinese parcels signals a tactical reset in U.S.-China economic relations. While Shein, Temu, and American consumers celebrate the relief, questions remain about long-term policy direction and enforcement.
Want to know more about Trump’s trade strategy? Read our post on the 2025 U.S. Trade Reset or explore the impact of the de minimis rule on global e-commerce.
