Interpretation: The United States Imposes Tariffs and Cancels the De Minimis Exemption, How Does It Really Affect Cross-Border E-commerce?

Before the 2025 Spring Festival holiday ended, the cross-border e-commerce industry suffered a heavy blow:

On February 1st, U.S. President Trump signed an executive order that imposed a 10% import tariff on all Chinese goods starting from February 4th. This includes parcels with a value lower than $800 that were initially exempt from tariffs. This means that regardless of how Chinese goods are imported into the U.S., a 10% tariff will be added to the original tariff rate for their category.

Subsequently, the United States Postal Service (USPS) announced the suspension of acceptance of incoming parcels from Mainland China and Hong Kong, and less than 24 hours later, notified the resumption of acceptance.

Meanwhile, many Chinese cross-border parcel logistics service providers including Cainiao, Yanwen, Yuntu, 4PX, and Orange Connex successively released notices of price increases. Sellers will be charged comprehensive tariffs or additional customs handling fees. Sellers were also advised to establish and improve the product declaration database to ensure accuracy of information such as HS code and declaration elements, etc.

Therefore, two main logistics models (overseas warehouse shipments and cross-border direct mail parcels) for cross-border e-commerce exports will face challenges related to increased customs and tax costs, as well as increased comprehensive fulfillment costs. In addition, the customs clearance efficiency of Chinese goods entering the U.S. is expected to be significantly reduced, affecting fulfillment efficiency.

The immediate problem, as advised by major logistics service providers to sellers, is that "due to the many uncertainties in the implementation details of U.S. customs policies, all parcels will be subject to a risk of delays." Sellers need to promptly adjust product pricing based on actual cost changes, digest the pressure from tariff increases through product portfolio pricing, and comprehensively weigh the pros and cons of overseas warehouse shipments and direct mail parcels to reassess the logistics method that suits them.

In addition to sellers suffering direct impact, the increase in tariffs and cancellation of the de minimis exemption will also cause profound shock to some cross-border e-commerce platforms and cross-border logistics service providers.

For fully managed models (where sellers deliver to the platform's domestic warehouse and then the platform directly sends to overseas consumers in the form of small parcels), platforms that depend on direct mail parcels need to adjust their business strategies. In the event of more complex customs procedures, increased logistics costs, and further compression of profit margins, they may balance the costs and price advantages of this logistics model through adjustments in prices and subsidies. On the other hand, they may also shift their focus more to overseas warehouse shipments under the semi-managed model, accelerate overseas warehouse infrastructure construction, and maintain low prices through "sea freight + local delivery," which will increase the pressure on capital and inventory.

As for cross-border logistics service providers, those who mainly handle small packets, due to more cumbersome customs clearance and longer clearance time, will face increased service difficulty and costs. They may also face the problem of losing clients as some sellers steer towards overseas warehouse shipments. Of course, some service providers that previously profited from the "breaking down shipments to avoid taxes" gray customs clearance model may find it difficult to survive due to policy tightening.

In comparison, overseas warehouse logistics service providers will also need to flexibly adjust their business strategies due to the uncertainties surrounding tariff policies. However, they are expected to see a surge in market demand, making them a preferred option for cross-border logistics.

After discussions with several industry experts, Ebrun summarized the potential industry impacts and future development trends resulting from the U.S. imposition of tariffs and cancellation of the de minimis exemption as follows:

1. The "De Minimis Exemption Period" for direct mail parcels has ended, causing sellers without core advantages, and low-profit sellers to accelerate exit from the market.

In accordance with the new U.S. tariff policy, numerous logistics service providers have already adjusted prices. This includes imposing a customs handling fee of 20 yuan/piece for goods or a pre-collected 30% tariff security deposit. They also collect comprehensive tariffs at a rate of 35% of the parcel's declared value, 25% for items other than textile apparel. Overall, logistics costs for e-commerce sellers have increased by approximately 20% to 30%.

For many traditional "pile and sell" or low-profit sellers, they previously opted for the relatively flexible direct mail parcel model without the pressure of overseas inventory stocking, relying on the "less than $800 tax-exempt" advantage. With this provision now absent, the logistics and tariff costs for these sellers have moved ahead of profits. Moreover, raising the selling price may weaken competitive advantages, while shifting to overseas warehouses also carries great challenges, including changes in cost structure and inventory pressure.

In the long run, traditional sellers without core advantages and low-profit sellers will rapidly depart from the market. Cross-border e-commerce will transform from "small parcel direct mail" towards "bulk sea freight + localized operation," leading to increased compliance costs and further supply chain management challenges, resulting in higher industry concentration.

2. The "T86 Customs Clearance Model" is basically abolished, and air mail parcel direct mail models may shift to sea freight consolidation models.

The T86 customs clearance code, specifically designed for the U.S. "Section 321" provision of the 1930 Tariff Act, which exempts imported goods worth less than $800 (personal use, non-commercial purpose) from tariff and fees, is no longer applicable. These parcels must be formally declared now, subjected to the usual commercial customs clearance process with detailed documentation (such as HS codes, proof of origin, etc.).

In other words, air mail parcel direct mail models following the T86 customs clearance model will not only lose the tax benefit, but also face longer clearance time and loss of cost and time advantages.

Meanwhile, sea freight consolidation models follow the general commercial customs clearance process and are not reliant on the Section 321 tax-exempt terms, which offsets potential policy risks. Importantly, consolidating multiple sellers' goods into one shipping container, allowing for a container-based declaration, can reduce tariffs and customs declaration costs per consignment. Additionally, the per-item shipping costs via sea freight are much cheaper compared to air mail, making it cost-effective for low time-sensitive products, even with longer transport times.

3. The overseas warehouse model is poised to attract positive developments and may gradually become the standard for cross-border e-commerce sellers.

Under the impact of the 10% tariff increase due to the U.S. government's recent policy, the cross-border e-commerce overseas warehouse delivery model will see a certain increase in costs, including additional taxes and customs costs. However, the impact of an additional 10% tariff is not significant and depends on the seller's category of goods, pricing strategies, supply chain elasticity, and the ability to shift costs. Additionally, many sellers rely on price-inclusive freight, resulting in a direct increase in freight costs.

Compared to the greater impact on direct mail parcel models, overseas warehouse models will benefit. Firstly, there may be a significant surge in semi-managed businesses on some platforms and an accelerated shift by sellers who previously relied on direct mail parcels, thereby driving the development of overseas warehouse stocking and direct delivery businesses. Secondly, given the increase in market demand, overseas warehouse-related resources are expected to be tight and prices may rise.

In addition, it worth mentioning that the State Administration of Taxation recently announced "exit and tax refunds" for taxpayers through the export of goods through a cross-border e-commerce overseas warehouse (effective from January 27, 2025), supporting the development of cross-border e-commerce export through overseas warehouses.

Sellers can directly apply for tax refund as long as the goods exported through overseas warehouses have completed customs clearance and left the country. For unsold goods, pre-tax refund can also be applied for after the goods have left the country, and tax payment settlement can be conducted after subsequent sales. This allows cross-border e-commerce sellers to obtain tax refunds in advance, thereby improving liquidity. This is particularly important for many sellers who rely on fast capital turnover.

In other words, although the new U.S. tariff policies have had a certain impact on direct mail parcels, the support of the State Administration of Taxation for overseas warehouses has brought benefits to cross-border e-commerce sellers. The "refund upon departure" policy further promotes the development of overseas warehouses, providing sellers with a more flexible and efficient tax processing method to alleviate cost pressures. It is foreseeable that more cross-border e-commerce sellers will set up overseas warehouses in the future.

Ebrun continues to track and report on this information. For more information related to this article, please scan the QR code to follow the author's WeChat.