By FARAH MASTER
HONG KONG — The United States will 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, with both sides agreeing to unwind most of the tariffs imposed on each other’s goods since early April.
While their joint statement in Geneva didn’t mention the de minimis duties, the White House order released later said the levies will be reduced to 54 percentfrom 120%, with a flat fee of $100 to remain, starting from May 14.
The de minimis exemption, for items valued at up to $800 and sent from China via postal services, were previously able to enter the United States duty free and with minimal inspections.
In February, President Donald Trump ended the de minimis exemption by imposing a tax of 120 percentof the package’s value or a planned flat fee of $200 – set to come into effect by June – blaming it for being heavily used by companies such as Shein, 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 recent years with more than 90 percentof all packages coming via de minimis. Of those, about 60 percentcame from China, led by direct-to-consumer retailers such as Temu and Shein. – Reuters
