US and European Cancellations of Small-Value Tax-Free Imports Impact Chinese E-Commerce

On February 7, the White House issued an order stating that the United States will temporarily allow small packages from China to continue entering the country duty-free. (Li Mei / Dajiyuan)

[People News] Following the abolition of the small tax-free policy by the US and European governments, there has been a marked reduction in the volume of packages arriving in Western countries. This development is interpreted by external analysts as a concrete application of the 'de-risking' strategy in the realm of trade and consumer supply chains.

On Friday, the Universal Postal Union published a report stating that by September 2025, one month after the US eliminates the 'de minimis rule', the total weight of small packages entering the US is expected to decline by 70.3% compared to the same period last year.

Postal operators from Germany, Japan, Switzerland, and other nations have halted shipments to the US, further intensifying this decline.

Additionally, there are restrictions on Chinese-related e-commerce platforms like Temu and Shein regarding the sale of inexpensive goods.

As reported by The Dajiyuan, the Trump administration's decision to abolish the small-value tax-free policy is intended not only to combat the importation of illegal drugs but also to restrict online retailers associated with China, such as Temu and Shein, from offering low-cost products to American consumers.

Since 1938, the low-value package exemption policy has been in place in various forms. The 'de minimis' policy allows imported goods valued under $800 to be exempt from tariffs. However, with the rise of cross-border e-commerce, the number of packages received in the United States has surged dramatically. By 2024, these packages represented 92% of the total volume of U.S. imports, with around 600,000 packages arriving daily from Chinese e-commerce platforms Shein and Temu.

In May 2025, the Trump administration first revoked the tax-exempt status for packages from China and Hong Kong, and in July of the same year, signed Executive Order 14324, which expanded the exemption's scope globally. This move aimed to prevent foreign suppliers and criminals from exploiting the loophole in tariff exemptions.

The policy change, which will take effect on August 29, 2025, means that all global import packages, regardless of their value or origin, will now be subject to standard U.S. customs duties. However, gifts sent by individuals valued under $100 will still be exempt from tariffs.

EU tariffs have resulted in a 31% decrease in incoming small packages.

The EU introduced a €150 tax exemption policy in 2008, but in recent years, the number of e-commerce packages has skyrocketed, increasing from 1.4 billion in 2022 to 5.8 billion in 2025. Dirk Gotink, an EU lawmaker focused on customs reform, remarked that the rise of Chinese e-commerce has fundamentally disrupted the traditional trade landscape, stating, 'They have massively abused the tax exemption rules at the expense of EU businesses, creating a competitive advantage for themselves.'

On July 1 of this year, the European Union eliminated the tariff exemption for packages valued at less than 150 euros (approximately 168 US dollars at current exchange rates) coming from outside the EU, and introduced a fee of 3 euros for each package. As a result, the number of packages sent to the EU dropped by 31.0% that month.

The report noted that, in contrast to the 'shock' triggered by the United States, the EU's policy adjustment had a 'longer lead time', which provided operators with the opportunity to adjust their rates and transport routes. Consequently, the overall weight of packages sent to the EU experienced a relatively smaller decline.

This 3-euro tariff is a temporary measure. Beginning November 1 of this year, the EU may implement additional handling fees to cover the costs associated with the increased volume of packages, with these fees to be evaluated on a regular basis. These fees will be replaced by standard tariffs assessed by category once the new EU customs data center becomes operational on July 1, 2028.

The press release accompanying the UN report stated: 'Given the current interconnected nature of the industry, changes in trade policies in any country or region can almost immediately impact all global operators. While the information necessary to respond to macro changes is available, the industry lacks a coordinated mechanism that allows for flexible decision-making.'

The report estimates that slow decision-making, which leads to a decrease in mail volume and delivery delays, results in global postal operators incurring losses of up to 70.8 billion US dollars annually.

The postal alliance is ramping up the development of an AI-driven unified data platform, designed to support rapid decision-making through the real-time collection and analysis of global postal data. The alliance has already developed a prototype of the platform and aims to implement it in practical applications by 2029.

Specific Practices of 'De-risking' in the US and Europe

The recent cancellation of the small-value tax exemption policy is perceived by external observers as a tangible implementation of the 'de-risking' strategy within economic and consumer supply chains. This move represents a defensive barrier erected by the US and Europe in the context of the 'daily consumer economy and dumping war.' Western nations have finally come to the realization that allowing China to exploit the domestic market with state-subsidized cheap goods and loopholes, thereby undermining the retail ecosystem, is tantamount to a slow form of self-destruction.

Addressing the Loopholes of 'Economic Security and Market Distortion'

Historically, the West permitted high tax exemption thresholds (for instance, $800 in the US) based on the principles of free trade and globalization. However, as Chinese e-commerce giants like Temu and Shein transformed this into a gray area of 'exploiting policy loopholes, dumping excess capacity, and dismantling local retail and small- to medium-sized enterprises,' Western governments recognized that this issue transcended mere business competition and posed a structural threat to national economic resilience. The elimination of the tax exemption is intended to firmly close the backdoor that adversaries have utilized to conduct 'economic unrestricted warfare.'

Eliminating "Overreliance on Supply Chains and Compliance Blind Spots"

The small parcel direct mail model has enabled thousands of inexpensive Chinese products, including those that violate regulations and fail to meet environmental and labor standards, to reach consumers in Europe and the United States directly.

Previously, platforms such as Temu, Shein, and Alibaba's subsidiaries shipped millions of ultra-low-priced items (like $5 clothing and $2 accessories) directly from Chinese factories to consumers in Europe and the U.S. via air freight every day. Because these packages had low unit prices, they not only completely avoided tariffs but also bypassed stringent product safety inspections (such as the EU's environmental and chemical residue standards) and U.S. customs checks. This situation not only undermined Western customs reviews and product safety regulations but also left local retailers, small and medium-sized enterprises in the U.S. and Europe, and even legitimate tax-paying e-commerce competitors unable to compete.

Western countries have finally come to the realization that allowing the Chinese Communist Party to exploit state-subsidized cheap goods and loopholes to plunder local markets and destroy the retail ecosystem is akin to a slow form of self-destruction.

With the cancellation of preferential policies for small packages, Chinese platforms are now compelled to comply with regulations, pay standard tariffs, and even relocate their supply chains and logistics warehouses back to their home country or to friendly nations.

Thus, the abolition of the small tax exemption policy is perceived as a defensive barrier erected by Western nations in the context of the 'everyday consumption economy and the dumping war.' The democratic bloc is employing laws, tariffs, and institutional measures to systematically reinforce the globalization doors that have been exploited by authoritarian regimes over the past few decades, closing them one by one. This reflects a comprehensive effort by the global democratic camp to implement 'de-risking' and compliance measures against the Chinese Communist Party (Zhongguo Gongchandang) across various sectors. △