Topic of the Week - Lower China Tariffs May Not Be Enough to Revive De Minimis-Reliant Supply Chains
The temporary reduction in US tariffs on China-made goods has generated optimism among direct-to-consumer shippers, but experts believe it may not be enough to fully revive de minimis-associated import methods. The de minimis exemption, which allowed sub-$800 imports from China to avoid added duties, was eliminated on May 2, leading to a significant decline in low-value shipments.
While the 90-day tariff reduction from 145% to 30% may provide some relief, experts predict a partial rebound in direct-to-consumer shipping activity out of China, but not enough to fully recover from recent lows. Many eCommerce sellers are expected to shift to traditional supply chains, using ocean carriers for bulk inventory storage in the US rather than air cargo for individual orders.
The reduction in tariffs may aid companies' transitions to traditional supply chains, but it is unlikely to fully revive de minimis-associated import methods. Businesses have already been exploring alternative sourcing options, such as Vietnam, and adding US-based fulfillment partners.
Compliance struggles have emerged post-de minimis, with importers facing tariffs and more stringent information requirements. Experts warn of illegal tactics, such as misrepresenting a shipment's country of origin or shipping items through third countries to evade tariffs.
CBP enforcement efforts are becoming more rigorous, and shippers are advised to accurately disclose the country of origin to avoid duties and potential fines. The agency is pushing importers to provide more detailed product descriptions, and vague descriptions will no longer be accepted.
In summary, while the temporary reduction in tariffs may provide some relief, it is unlikely to fully revive de minimis-associated import methods. Businesses are advised to explore alternative sourcing options and traditional supply chains to ensure compliance with evolving trade rules.
eCommerce Market Stats
See some statistics relating to this week’s topics in the eCommerce market below.
Tariff eCommerce stats
- Tariffs could lead to a 10% decline in online sales in the United States by 2025.
- The average tariff rate on imported goods in the United States is expected to increase to around 4.5% by 2025.
- Tariffs could lead to a 2.5% increase in prices for imported goods in the United States by 2025.
- 80% of small and medium-sized manufacturers will be affected by tariffs by 2025, with 50% reporting a significant impact.
- 70% of supply chain professionals will experience disruptions due to tariffs by 2025.
That’s all for this week…
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