- US tariff exemption for low-value items from China ends Friday
- Ecommerce goods from China face jump to 145% tariffs
- Some online retailers stop serving US over tariffs
- Shein seeks to reassure shoppers in Instagram post
LONDON, May 2 (Reuters) - With the end of a U.S. tariff exemption for small parcels on Friday, some retailers have stopped selling to customers in the United States while others are seeking temporary workarounds in the hope the tariff rate may be reduced.
The removal of “de minimis” - duty-free treatment of e-commerce packages worth less than $800 - for products originating from China and Hong Kong exposes those goods to tariffs of 145% on most Chinese goods following U.S. President Donald Trump’s decision last month. The move upended global trade and triggered retaliation from Beijing.
British beauty products retailer Space NK has paused e-commerce orders and shipping to the United States “to avoid incorrect or additional costs being applied to our customers’ orders”, the company said in a notice on Wednesday.
It is not alone. Understance, a Vancouver-based company that sells bras and underwear manufactured in China, told customers in an Instagram post that it would no longer ship to the United States due to the tariffs, saying it will resume once there is clarity.
“We’re going from zero to 145%, which is really untenable for companies and untenable for customers,” said Cindy Allen, CEO of Trade Force Multiplier, a global trade consultancy.
“I’ve seen a lot of small to medium-sized businesses just choose to exit the market altogether,” she added.
PRICE HIKES UNDERWAY
Players willing to continue to access the U.S. market are forced to hike their price tags.
Oh Polly, a British clothing retailer, has increased prices in the U.S. by 20% compared to its other markets, and may have to consider further price increases because of the higher tariffs, said managing director Mike Branney.
Singapore-based fast-fashion giant Shein sought to reassure customers in a post on its U.S. Instagram account on Thursday, saying: “Some products may be priced differently than before, but the majority of our collections remain as affordable as ever.” Shein sells clothes mostly manufactured in China, and the U.S. is its biggest market.
Temu, the international arm of Chinese e-commerce giant PDD Holdings (PDD.O) , prominently featured products already in U.S. warehouses on its website, labelled ‘Local’, and a pop-up informed customers there would be no import charges for local warehouse items.
“All sales in the U.S. are now handled by locally based sellers, with orders fulfilled from within the country,” Temu said in a statement, adding that its pricing for U.S. customers “remains unchanged”.
But items imported before the May 2 change will eventually run out. Both Shein and Temu have slashed their U.S. digital advertising spending in the past weeks as they prepared for the change that is likely to hit their sales.
Shein did not immediately reply to a request for comment.
“E-commerce companies have had it really good for a really long time, and this is a seismic shift in how trade works,” said Hugo Pakula, customs expert and CEO of trade automation platform Tru Identity. “If your inventory is not already in the U.S., selling to the U.S. is going to hurt.”
If there’s demand, I expect that they’ll offer smaller shipments at a higher unit price. There’s lots of stuff that they do sell in smaller shipments. If not, theoretically some electronics distributor could go into business just buying larger shipments, repackaging them into smaller shipments, adding a markup, and addressing that market.
Poor Radio Shack didn’t live long enough, but this would have probably been a good time for them.
EDIT: Not available everywhere in the US — like, not a solution for some electronics engineer in Wyoming trying to design a prototype of some new device — but we have some brick-and-mortar electronics component stores in the Bay Area in California still, stuff like Anchor Electronics.
EDIT2: Apparently there are actually still some post-bankruptcy Radio Shack stores, though under new ownership, and looking at their website, I think that they’ve exited the electronics component business entirely, just doing consumer electronics.
Ah, the good ole days. When I was a wee tot just learning about electronics, I would head on down to radio shack for parts, wire, breadboards, solder, or a little booklet with diy schematics to make something like a little amplifier.
I still remember my first major repair - changing a bridge rectifier and some capacitors in my pioneer stereo amplifier.
I couldn’t have done that without RadioShack. RadioShack was the source of all my early knowledge, and foundation for my future skills and knowhow.
Yeah, I’ve got some warm fuzzies for 'em too, have had a few situations where I needed some component or exotic battery cell ASAP and having it minutes away was really nice. That being said, I wouldn’t have wanted to try to keep them afloat as a business.