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The United States Postal Service early on Wednesday said it would resume accepting packages from China and Hong Kong, reversing a brief hours-long freeze.
In a statement, the Postal Service said it is working with Customs and Border Protection to implement an “efficient collection mechanism” for President Donald Trump’s new tariffs, which have evolved into a burgeoning trade war with Beijing.
The temporary move came several hours after Trump’s new duties of 10% on Chinese exports to the U.S. took effect. China hit back with its own proposed tariffs, which begin next week, export controls related to critical minerals, and a series of targeted actions at companies including Google (GOOGL-7.26%).
The suspension was expected to hurt Chinese e-commerce companies, several of which have a growing presence in the U.S. despite making most of their money in the domestic market. American depositary receipts of Chinese retail giant Alibaba (BABA-2.86%) fell by more than 2% in early trading on Wednesday.
Rival Punduoduo’s stock was down 7% ahead of the market open, while JD.com (JD-2.99%) stock sank 2%. Amazon (AMZN-2.19%) stock also fell 1% in pre-market trading Wednesday, as its reliance on Chinese-based sellers may become a liability.
“China-based sellers account for significant portions of our third-party seller services and advertising revenues, and China-based suppliers provide significant portions of our components and finished goods,” Amazon noted in its 2023 annual report, adding that geopolitical and other events affecting those groups could impact its operating results. The company reports full-year earnings for 2024 on Thursday.
Trump’s orders also closed the de minimis exemption, a key loophole used by e-retailers such as Temu and Shein to keep prices down. The law allows for packages valued at less than $800 to enter the U.S. duty-free as long as they are packaged and addressed to individual buyers.
According to Customs and Border Protection, more than 1.36 billion shipments entered the U.S. claiming the de minimus exemption. In 2015, just 139 million shipments claimed the exemption.
Shipments from China and Hong Kong accounted for roughly a third of U.S. de minimis imports in 2023, according to a Congressional Revenue Service analysis published last month. In 2022, more than 80% of U.S. e-commerce imports were de minimis shipments, according to the International Trade Commission.
Pinduodo’s Temu (PDD-3.40%) was on track to reach $30 billion in sales under its strategy to offer cheap goods in exchange for longer delivery times, although the new actions will likely be a setback. Amazon Haul, an ultra-cheap platform designed by Amazon to compete with Temu and Shein, directly ships products to U.S. consumers directly from China. With the new tariffs, such companies’ reliance on low-cost, individual shipments from China is likely to become more expensive.