President Trump has officially ended the de minimis exemption, which previously allowed Temu, Shein, Amazon Haul, and other retailers to send packages valued under $800 duty-free from China to the US. Those same packages are now subject to tariffs as high as 145%. Trump initially announced the new tariffs in early April, set the begin May 2nd, and subsequently increased the duty rate between then and now.
The import charges differ depending on how the goods are shipped. For example, if they come on an express carrier like DHL or FedEx, they'll be subject to tariffs as high as 145%, while shipments through USPS will face a tariff of 120% or a fee of $100 per package (which will increase to $200 in June).
Here are a few examples of how the new tariffs are impacting industries:
- Adidas CEO Bjørn Gulden warned that prices of almost all of its products will go up in the US because the company “currently cannot produce almost any of our products in the US.”
- Coca-Cola's CEO James Quincey said that the effects of tariffs on the beverage company are “manageable” because most of the ingredients used at its bottling facilities are sourced locally; they only import machinery.
- Hasbro CEO Christian Cocks said that the tariffs could hit toy sales with a force “consistent with what happened with the 2008 and 2009 recession” and that they could hit Hasbro's net profit by between $60M and $180M this year.
- Analysts across 12 major brokerages raised their price targets on eBay because they see the second-hand goods market growing in the near future.
- E-commerce shipment volume on cargo charter flights from China has dropped by approximately 50% since mid-April compared to the same period last year, according to freight forwarder Dimerco. The company also said that major Chinese carriers were considering cancelling services.
- Meta CFO Susan Li warned investors that its infrastructure investments, particularly in AI, could end up costing the company as much as $72B this year due to suppliers raising prices over tariffs.
- Rainforest, a Singapore-based e-commerce aggregator that operates 15 brands, 90% of which sell to US consumers via Amazon with goods sourced from China, is sunsetting two underperforming labels as their last remaining margins become evaporated by tariffs.
- Temu removed all products from its US store that ship from China (more on that in story #2 below).
- US tariff income hit record levels in April, surging to over $17B from a 2024 average of $8B per month, however, that was mostly from non-China tariffs, which we've yet to see the impact of.
In an interview with NBC on Friday, President Trump said he would not be willing to drop tariffs on China to get Beijing to come to the negotiating table.
Trump said:
“They said today they want to talk. Look, China, and I don't like this. I'm not happy about this. China's getting killed right now. They're getting absolutely destroyed. Their factories are closing. Their unemployment is going through the roof. I'm not looking to do that to China now. At the same time, I'm not looking to have China make hundreds of billions of dollars and build more ships and more Army tanks and more airplanes.”
However he did say he would eventually lower tariffs:
“At some point, I'm going to lower them, because otherwise you could never do business with them. And they want to do business very much like their economy is really doing badly. Their economy is collapsing.”