Cheap plots from China will no longer be out of taxes

NEW YORK (AP) – Consumers can expect higher prices and delivery delays when the Trump administration ends a franchise exemption from rights to low value from China on Friday.

The expiration of the so -called minimis rule which has enabled 4 million low value packages to come to the United States every day – mainly from China – also forced companies that have built their models on production of production in China to rethink their practices in order to reduce their costs.

But some may benefit from the termination of the exemption from rights. For example, companies that make their goods in the United States may feel relief from cheap Chinese imports and probably feel brighter sales prospects.

This decision, which applies to goods from continental China and Hong Kong, presents itself in addition to President Donald Trump new rates totaling 145% on China. Beijing retaliated with 125% tariffs in the United States, fueling a trade war between the two largest economies in the world. Sellers already see prudent consumers.

Trump on Wednesday described the exemption as minimis “a large scam against our country, against very small businesses”.

“We have ended it,” he said.

What is Minmimis’ arrangement?

Introduced in 1938, the exception of minimis was intended to facilitate the flow of small packages valued at $ 5, the equivalent of around $ 109 today. The threshold reached $ 800 in 2016. But The rapid rise in cross -border electronic commerceMotivated by China, disputed the intention of the exception of customs of several decades.

Chinese exports of low -value packages climbed $ 66 billion in 2023, compared to $ 5.3 billion in 2018, according to a February report by the Congressional Research Service. And the American market was a major destination.

Former President Joe Biden proposed a rule last year which said that foreign companies could not avoid prices simply by shipping goods that they claim to be $ 800 or less. Trump tried in February to end with the exception, but his initial order was called In a few days, when it appeared, the United States was not ready to treat and perceive prices on the package of packages.

What is the impact on buyers?

Consumers will face higher prices and delivery delays now that packages will go through a more complicated customs process to enter the United States involving the declaration and payment of rights.

Companies could take into account prices in the final price, or they can list them separately in the same way as sales taxes. For example, TEMU, which belongs to the Chinese Electronic Commerce Company PDD Holdings, now lists the “import costs” which have would have doubled Many prices of articles. (The retailer also has a “local warehouse” option for certain products, which are shipped to the United States and therefore avoid import costs.)

Meanwhile, Shein, now based in Singapore, has a cashier of a cash register as follows: “The prices are included in the price you pay. You will never have to pay more on delivery. ”

Amazon said he does not intend to display added price Costs alongside the prices of products on its site – despite a report that has triggered speculation, the electronic commerce giant would soon show the new import costs, and the White House made inflamed comments denouncing the alleged change.

What about sellers and carriers?

Package carriers will be overwhelmed by the collection of tasks, and documents to comply with the new rule could result in not only higher prices, but also delays and even disturbances on delivery, said Ram Ben Tzion of the public verification platform.

The main commercial carriers such as UPS and Fedex declared that they were well equipped and ready to receive tasks on international plots in accordance with local laws, including the new American rule.

Commercial carriers will receive 145% prices on declared values. The American postal service, a government agency that offers an international messaging service, can choose either a price of 120% on low value packages or flat -rate fees of $ 100 per shipment, which should reach $ 200 on June 1.

Customs and the protection of American borders indicate that it “is ready to fully implement the restrictions on minimis expeditions and to perceive all the income due for these expeditions on May 2, 2025.”

However, experts have expressed their concerns that the overvoltage of the workload could be a serious challenge.

In January and February, more than 70% of the 216 million packages from the United States were from China, according to CBP.

What is the impact on businesses?

Those who counted on the minimis exemption must now adapt.

John Curry, owner and chief executive officer of Hapii International, a swimsuit company based in Arizona, had gone from bulk shipping to Minmis Shipping about six months ago to improve cash flows, accelerate delivery and possibly eliminate American storage. His company manufactures its products in China and sells them directly to American customers via its own online showcase.

Curry said he was planning to save the course and pay the 145% additional rights – a package at a time – while waiting for the United States and China to develop a more sustainable approach.

“There must be a solution because the two countries cannot survive this way,” said Curry.

IZZY ROSENZWEIG, founder and CEO of the company Logistics Portless, help of companies like Hapari to send goods from its warehouse in China using the minimis exemption. He says that American companies are likely to stay in China for the moment, the competitiveness of the manufacturing base and the supply chain in China, but should increase prices.

And although companies with good beneficiary margins will likely continue to ship China, those that operate on thin margins of razor are likely to “become local”, setting up more warehouses based in the United States to tougher tariff costs, he said.

Who benefits?

Trade groups representing manufacturers of flags and bicycle dealers have said they expected to benefit from the end of the exemption from rights.

In comments written on the portal of American commercial representatives, for example, the Flag Manufacturers Association of America said that its members had been bombed by an American flag import attack mainly manufactured in China which are falsely marketed and considerably updated. The group cited a 25% to 35% drop in sales at the American flag industry industry last year.

Larry Severini, CEO of Embroidery Solutions Manufacturing LLC, which makes star fields for manufacturers of American flags, had to close one of its two factories in South Carolina earlier this year due to the rigorous competition of cheap imports. He noted that sales have dropped by 20% since 2021 in part due to the minimis exemption.

“We need tasks to level the rules of the game to make it fair,” said Severini.

Heather Mason of the National Bike Dealers’ Association said that buyers often consult a $ 2,000 bike from a confidence brand like Trek, then they find an online lookalike for $ 1,200 – often with lower quality parts, no warranty, no service and security risks.

“The deemed brands follow strict safety, labor and guarantee standards,” she said in an e-mail to the Associated Press. “De Minmimis allowed the bad players to dodge them.”

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Tang reported Washington.