US cuts tariff on small China parcels from 120% to 54%

The US has announced it is slashing the tariff on small parcels sent from China and Hong Kong to the US from 120 per cent to 54 per cent, hours after Washington and Beijing agreed on a 90-day pause in their trade war.

Donald Trump signed an excecutive order that cuts the tariff aimed to close the “de minimis” loophole, which allows low-value goods ( which means “of little importance” in Latin), to be sent to the US without paying any import fees.

Previously this “de minimis” exception allowed any goods under $800 to enter the US duty-free with minimal inspection. This allowed the huge rise of fast fashion companies sending goods from China like Shein and Tem to flood the US market and undercut local suppliers. 

In February the US president aims to close the loophole, slapping on a 120 per cent fee on the value of any package coming into the US from China or a flat fee of $100 from May.

Now, the tariff shall be cut to 54 per cent from Wednesday (tomorrow). The alternative flat fee of $100 will remain but not rise to $200 in June as planned.

Both countries have agreed to reduce their tariffs by 115 percentage points.