Thu, Feb 06, 2025 page9

• USPS suspends inbound parcels from China, HK

  • Bloomberg
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  The US Postal Service (USPS) is temporarily suspending inbound international packages from China and Hong Kong, potentially delaying or blocking shipments from retailers such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu.

  The package freeze highlights a wider challenge to globally minded businesses from incremental complications, which could be compounded if the US-China trade relationship worsens.

  The USPS announcement rattled Asian markets, sending shares of Chinese e-commerce retailers down.

  

  A US Postal Service employee wearing a Santa hat sorts mail at the Los Angeles Processing and Distribution Center on Nov. 30, 2022.

  Photo: AFP

  “There’s a more macro risk to the market now as all these seem to be an escalation of the trade war between the US and China,” Sydney-based AT Global Markets chief analyst Nick Twidale said. “I think we will see these micro issues from both sides increase.”

  Shares of Alibaba Group Holding Ltd (阿里巴巴集團) fell more than 2 percent in Hong Kong and JD.com Inc (京東) tumbled more than 5 percent before paring losses.

  While it is not clear what prompted the USPS move, it comes after US President Donald Trump revoked a de minimis rule for China, which previously allowed small packages under US$800 to enter the US duty-free. That exemption, often used by Chinese-linked e-commerce companies, was removed as part of a new 10 percent tariff on goods from China and Hong Kong, which took effect just after midnight on Tuesday.

  The de minimis revocation is a “significant challenge” for USPS in terms of sorting out how to execute the new tariff rules, Morningstar senior equity analyst Chelsey Tam said. “There were 4 million de minimis packages per day in 2024, and it is difficult to check all the packages.”

  The USPS restriction might have a more limited impact than it would have years ago, as many companies have moved away from USPS for international shipping, analysts said.

  Letters and flat mail from China and Hong Kong would not be affected, USPS said in a statement on its Web site.

  Washington is cracking down on a loophole that retailers such as Temu and Shein have used for years to expand in the US, allowing them to ship high volumes of small packages and gain an edge over competitors such as Amazon.com Inc.

  Critics say that the flood of parcels from China is difficult to track and might contain illegal or dangerous goods.

  The total volume of de minimis shipments into the US hit 1.4 billion packages in the last fiscal year, US Customs and Border Protection data shawed, about double the number in 2022.

  Discount online retailers such as Temu and Shein contributed significantly to the spike in volume.

  However, disruptions from the USPS move might more limited now than they would have been in previous years, as other operators have taken over the postal service’s role in handling cross-border lightweight e-commerce packages, including those from China, according to a US Office of Inspector General report in May 2023.

  The amount of global mail USPS handles from all countries has dropped sharply.

  USPS’ annual volume of inbound international mail declined to fewer than 200 million pieces in 2022 from more than 600 million pieces in 2017, the US Government Accountability Office said in a report last year.

  Higher rates at USPS made United Parcel Service Inc, Federal Express Corp and other carriers more competitive and they absorbed the volume, the report said.

  The move is “not good, but probably more symbolic,” Bloomberg Intelligence analyst Marvin Chen said, adding that most parcels would be delivered by private shippers.
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