Update: Unfortunately Trump backed down on ending China’s De Minimis exemption after three days because huge amounts of Chinese parcels were piling up at airports. It is unclear what Trump intends to do next.
On September 13th, 2024, the Biden Administration ordered federal regulatory bodies to end the De Minimis exemption for a huge percentage of Chinese small parcels. Biden said that this was to reduce the overall volume of the millions of Chinese parcels entering the USA daily. However, Biden provided no date, or timeline. Then it was never reported to the public and virtually no one knew it about it.
Then, on February 1st, Trump expanded on Biden’s new rules and ordered a full stop to the De Miminis exemption on all Chinese small parcels beginning February 4th.
The De Miminis exemption for Chinese small parcels was started under Herbert Hoover in 1930 and was expanded under Obama in 2016. Since 2016, any Chinese small parcels with goods worth less than $800, were not subject to tariffs and import duties. Most of the time, they completely bypass customs in general, due to the extreme volume.
In 1874, the US and China signed a bilateral treaty to deliver mail from each other’s countries. The purpose was to help the railroad industry recruit cheap labor from China. At the time, it was only a relatively small amount of mail. However, by the 2010s, this system began devastatingly affecting the United States Postal Service [USPS] because the number of small parcels from China rose exponentially each year. The USPS is mandated to deliver small parcels from China for less what they received to deliver the size domestic parcel.
Imagine you ordered two of the same items on eBay. One was shipped by your next-door neighbor and one by a guy in China. The guy in China pays less for shipping than your next-door neighbor does. On top of that, when your next-door neighbor purchased the product wholesale from an importer, he already paid to cover the cost of freight shipping from China, tariffs, and import duties. The guy in China pays none of that.
Many of these drop-shipped products are also inferior versions that bypass regulatory bodies, lack safety features, contain toxic ingredients, or violate copyright laws.
This is why eBay, Amazon, and US-based e-commerce websites are now full of people who are just drop-shipping products from China. This is how multiple Chinese drop-ship companies have become massive international businesses. These small parcels, also known as “ePackets,” can be up to 4.4 pounds and can have a combined length, width, and height of up to 36 inches.
In 2019, Trump took action after incoming Chinese small parcels exceeded the one billion per year mark. Changes by the Trump administration raised the cost of mailing a small parcel from China to the USA. However, it was not enough, and people in China were still paying about half of what Americans were paying to ship the same size parcels domestically. The number of small parcels from China has continued to rise each year.
Each time you mail something within the USA, you are subsidizing the cost of delivering these parcels from China! This is a major reason why the cost of postage keeps rising so fast.
Many people believe the end of the De Minimis exemption will dramatically reduce the number of small Chinese parcels sent to the USA. Someone shipping items from China will need to start collecting a lot more information from the customer and do paperwork on the item. However, Trump implemented a blanket 10% tariff on all Chinese imports on Tuesday, the same day the De Minimis exemption ended. This complicates it even further.
USPS could see a massive reduction in the costly burden of delivering over one billion small Chinese parcels per year.
The following Youtube video details the “crackdown” on China’s De Minimis exemption already ordered by Biden, before Trump took office.
