On April 2, in addition to announcing new tariffs on global trading partners, including a 34% tariff on Chinese goods on top of the existing 20% tariff, US President Trump also signed an executive order to once again cancel the duty-free treatment for small imports from China and Hong Kong.
The order states that starting May 2, goods from China and Hong Kong worth $800 or less entering the United States will be subject to a 30% tariff, or $25 per item. The rate will rise to $50 per item after June 1. U.S. Commerce Secretary Howard Lutnick will also consider whether to extend the rules to Macau.
Trump has repeatedly used the trade deficit as an excuse to advocate the use of tariffs to reverse the current situation where the United States buys a large amount of goods from other countries, thereby increasing domestic manufacturing. Two months after he took office, the United States announced the implementation of reciprocal tariffs on major trading partners and abolished the duty-free treatment of small imports from China, in an attempt to further prevent Chinese goods from flowing into the United States.
However, Shi Jiandao, an expert on Chinese economic issues at the American Enterprise Institute, warned in an article that multinational companies can always find ways to deal with it. In addition, it is not easy to establish an appropriate system to accurately implement the above regulations. Small packages may still enter the United States through other countries or from China. Therefore, Trump's trade policy may not stabilize and take effect until the tax cuts are implemented, that is, in 2026.
According to Reuters, Hong Kong's South China Morning Post and other reports, Trump's new executive order fills the trade loophole that allows low-value packages to enter the United States duty-free, but the US government's expenditures for compliance may exceed the tax revenue brought by the cancellation of the exemption. In addition, Chinese retail platforms such as Temu and Shein will also respond, such as shipping goods in bulk to overseas warehouses and then distributing them through local supply chains.