The Uncertainty of US Tariffs A Threat to Cross-Border E-commerce in China?

The Uncertainty of US Tariffs A Threat to Cross-Border E-commerce in China?

The recent flip-flop on tariff policies by the US government has sent shockwaves through the cross-border e-commerce industry in China. The uncertainty surrounding these policies has created significant challenges for merchants and consumers alike.

According to an industry expert, the Chinese cross-border e-commerce sector can mitigate the impact of potential policy shifts by optimizing supply chains and diversifying market strategies. However, the effects of US tariffs on small packages are already being felt.

The US imposed a 10% tariff on Chinese products and adjusted its small value tax exemption policy. The new rule eliminated the de minimis exemption for small parcels valued at under $800, making these packages no longer duty-free. This change has caused disruptions for customs inspectors, postal and delivery services, and online retailers.

One industry insider in Shanghai noted that goods shipped to the US before the Spring Festival faced customs clearance issues. The US Customs and Border Protection imposed tariffs exceeding declared values of $60 to $130, which was deemed absurd by the individual.

The uncertainty surrounding US trade policies is also prompting merchants to explore new development paths. According to Gu Tao, a Chinese merchant, the tax exemption policy for small packages will likely be canceled in the long run, and the current pause is simply a temporary measure.

Many self-shipper merchants who relied on the $800 de minimis exemption to send small packages directly to US customers without paying duties have been significantly affected. Han, a self-shipper of camera accessories on e-commerce platform Temu, noted that the combined costs of shipping, registration, and tariffs for a $10 product have increased by about 40%, making it impossible to maintain profitability.

In response, some merchants are considering changes to their business models. Han stated that many of his counterparts are discussing pricing adjustments and customs declaration challenges in a WeChat group and exploring alternative strategies.

Yang Ming, a toy factory owner in Shantou, Guangdong province, noted that many of his peers are turning to a hybrid model that leverages overseas warehouses and domestic logistics services in the US to help cross-border e-commerce sellers manage inventory more efficiently, reduce costs, and boost delivery efficiency.

E-commerce platforms such as AliExpress, Temu, and Shein have also introduced semi-managed models, which allow merchants to maintain operational control while the platform handles warehousing and logistics, requiring merchants to stock inventory overseas.

Moreover, the industry is looking toward market diversification as a long-term strategy. Many merchants are considering expanding into emerging markets such as Southeast Asia and the Middle East, which have shown strong growth potential and consumer demand.

According to Cao Lei, deputy secretary-general of the China Cross-border E-commerce 50 Forum and director of the E-commerce Research Center of the China Internet Network Information Center, the new US rule is likely to raise the cost of imported goods, and for cross-border e-commerce that relies on overseas suppliers like China, profit margins will be significantly compressed.

This could lead to price hikes for consumers in the US and reduced competitiveness for related businesses.

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CEO / Co-Founder

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