The US Postal Service said it is temporarily suspending inbound parcels from China and Hong Kong, in a potential blow to Chinese e-commerce retailers.
In a statement on its website Tuesday evening, the USPS said the suspension would take effect immediately and be in place "until further notice." It does not apply to letters and flat mail.
The suspension comes after President Donald Trump imposed a new 10% tariff on all goods imported from China and ended the de minimis exemption that allowed packages worth less than $800, bound for individual consumers, to avoid tariffs.
Louise Loo, the lead economist for Greater China at Oxford Economics, wrote in a note on Tuesday that the exemption had been "particularly relevant" for Chinese e-commerce retailers — such as Shein and Temu — and that China and Hong Kong accounted for 67% of packages entering the US under the exemption between 2018 and 2021.
PDD, Temu's parent company, was down 6% in premarket trading on the Nasdaq after the USPS announcement.
There were more than 1.36 billion de minimis shipments into the US in the 2024 fiscal year according to the US Customs and Border Protection.
The agency said in a January statement that shipments into the US under the exemption had risen by more than 600% over the past decade.
"This exponential increase has created challenges for CBP's effective enforcement of US trade laws, health and safety requirements, intellectual property rights, and consumer protection rules," the statement added.
'The next couple of days are going to be chaotic'
US consumers can expect chaos with their packages, a trade specialist told Business Insider.
"There'll be disruption, there'll be cancellations, the next couple of days are going to be chaotic," said Ram Ben Tzion, the CEO of Ultra Information Solutions.
Chinese exporters could choose to use companies such as DHL, UPS, and FedEx — but this demand surge could cause freight costs to increase, said Ben Tzion. His company is behind Publican, a digital vetting platform for global trade.
Private freight companies may also start evaluating how they plan to handle inbound packages from China and Hong Kong.
"The suspension is actually sending a very strong message to FedEx, to UPS, to DHL that they also need to consider if they continue taking packages from China," Ben Tzion said.
He advised consumers to wait before carting out any products that are shipped out of China or Hong Kong.
"If you continue buying on Shein, Temu, Alibaba, or Amazon, I strongly suggest that you wait for the next week to see how it plays out, because it's going to be a mess," said Ben Tzion.
USPS declined to elaborate on its statement when contacted by BI.
