Tariffs Come and De Minimis Ends for China

President Trump's tariff announcement on April 2 has put reciprocal tariffs on 60 countries (April 9) and a baseline tariff of 10 percent on all other countries (April 5). But perhaps the biggest impact for the logistics industry is the President's decision to end the de minimis exemption on goods imported from China and Hong Kong, effective May 2.

The end of de minimis treatment for China and Hong Kong was included in the original Executive Order in early February, but the administration paused the termination after CBP was inundated with formal and informal entries and the Postal Service briefly had to turn off acceptance of packages from China and Hong Kong. Even with 30 days to transition to the elimination of the $800 de minimis exemption, confusion is likely. The amended Executive Order of April 2 creates a new postal duty of $25 or 30 percent of the declared value of the good, in lieu of the duties and tariffs. That fee will double to $50 in a month, on June 1. See the White House fact sheet on the de minimis exemption termination. Airlines will be responsible for collecting the postal duty from China Post or Hong Kong Post and remitting it to CBP.

However, shippers and their service providers have many specific questions on how this will work exactly. For instance, is the postal duty per package or per item in the package? Shippers also want clarification on whether the duty is on country of shipment or country of origin (as it is in the commercial channel).