On May 12, the United States and China announced a temporary tariff reduction agreement, with the Trump administration agreeing to lower the new tariffs on Chinese imports from as high as 145% to 30%. This tariff reduction measure will be in effect for 90 days starting from Wednesday, May 14, during which both sides will continue negotiations on tariffs and other trade issues.
However, this agreement does not cover the de minimis exemption policy which exempts small packages under $800 from tariffs, a policy that was terminated on May 2.
According to a joint statement released on Monday, the original “reciprocal tariffs” between the U.S. and China will be lowered from 125% to 10%. The U.S. will also maintain the 20% fentanyl tariff on Chinese goods, resulting in an overall tariff level of around 30% for American imports from China.
Upon hearing the news, shipping containers from Chinese freight companies were immediately prepared for shipment, as Renmond Li, who imports furniture from China to the U.S., informed the Epoch Times on the 12th that “they are getting nervous and gearing up for shipping.”
For some small local businesses in New York, the tariff exemption for small packages under $800 before the implementation of tariffs meant that even after the 145% tariff was implemented on April 8, they could still ship urgent items by air. However, the additional 145% tariff cost after May 2 made air freight using small packages less cost-effective.
Mrs. Liu, who operates a toy store at the Flushing Skyview Center in New York, told the Epoch Times reporter that the tariff reduction news was good news for her. She has resumed purchasing from Chinese suppliers and finds the 30% tariff levied acceptable for her business.
“I’m ready to send shipments flying from tomorrow,” she said, having already stocked up. “They (the Chinese) have already calculated it for me. The courier company has not received the notification of the tariff transition yet, but they have given me the lowest quote, which still amounts to over a hundred dollars, less than two hundred.”
This time, Mrs. Liu ordered two urgent small items, and the international shipping quote already included the minimum tariff that she had to prepay. “They wrote a minimum estimated value,” she explained, noting that the actual amount can be adjusted during customs clearance.
She mentioned that this arrangement ensures that her store can restock in time. “For non-urgent items, I use ocean freight,” she said. Ocean freight takes about 20 days, but with the 90-day tariff suspension period, it is sufficient to meet the store’s demand.
Regarding the overall impact, she believes that her small-scale store can withstand it. “It’s just a little over a hundred dollars less profit for me. In the end, the impact on my small company isn’t significant.”
She sees Trump’s tariff reduction strategy as a means of maintaining balance. “You don’t take advantage of me, I’ll charge you (tariffs) and you charge me, now we’re even. I just want to bring the world back to normal. I think that’s what he’s thinking because he’s good at doing business himself.”
As the tariffs are significantly reduced, whether small packages under $800 from China will once again enjoy exemption remains unclear at this point.
Ms. Liu, who frequently shops on Chinese e-commerce platform Taobao, expressed to the Epoch Times that upon hearing the news on May 12, she immediately contacted Chinese forwarding companies to inquire about the tariff details. She believes that under the current 30% tariff situation, purchasing some “products that are not available in the U.S. but are really good” from China is still worthwhile. Additionally, she thinks that consolidating multiple items for shipping is more cost-effective.
She believes that at this time, there is no need to opt for air freight for shipments from China, as the tariff policy is valid for 90 days, and sea freight rates are only about half of air freight. “Now I want to know how U.S. Customs calculates tariffs. The price tags on the clothes I buy are very high, but the actual purchase prices are very low.”
Therefore, she plans to inquire more about various Chinese forwarding companies because the probability of customs inspections is low. She has already left a message inquiring about how tariffs are charged, stating that “there may be ways to save some tariffs.”