Persons who don’t routinely monitor government affairs must have been puzzled earlier this week when, from one day to the next, the Postal Service announced it wouldn’t – then reversed course and announced it would – accept packages from China Post and Hong Kong Post.
As was later apparent to the broader mailing community, this wasn’t a situation in which the USPS was being indecisive, but rather one common to all international shippers that was caused by sudden and abrupt policy changes by the US government.
For its own purposes, the administration had imposed 25% tariffs on goods imported from Canada and Mexico and a 10% tariff on imports from China. The tariffs on Canadian and Mexican imports were suspended before they were to be effective, but the tariff on Chinese goods took effect on February 10.
De minimis
In addition to imposing that tariff, the administration terminated the de minimis exemption from duties for items valued at less than $800. As reported on February 5 by Reuters:
“The provision was initially intended as a way to streamline trade, and its use has surged with the increase in online shopping. … About 1.36 billion shipments entered the United States using the de minimis provision in 2024, up 36% from 2023, according to CBP data. …
“Currently, de minimis parcels are consolidated so that customs can clear hundreds or thousands of shipments at once, but they will now require individual clearances, significantly increasing the burden for postal services, brokers and customs agents. …”
In other words, the thousands of items that could have been cleared through customs in bulk now had to be handled one by one so that the appropriate customs could be collected, an increase in activity for which US Customs and Border Protection was not prepared, so the effect of the administration’s decision was more far impactful on USCBP than on the Postal Service or other shippers.
Therefore, the USPS decision to stop accepting packages from China and Hong Kong Posts was part of the overall halt until the necessary inspection and collection processes could be activated. The reversal came when it became clear that they didn’t exist; USCBP was totally unprepared and needed time to develop and implement such procedures.
As reported by The Washington Post,
“‘The USPS and Customs and Border Protection are working closely together to implement an efficient collection mechanism for the new China tariffs to ensure the least disruption to package delivery,’ a Postal Service spokesperson said in a statement Wednesday.”
Kate Muth, executive director of the International Mailers Advisory Group, was more candid in describing the situation, telling Reuters: “Making the change through the traditional federal rule-making process would have allowed affected parties to provide input and adjust in the months-long period before implementation. ‘We don’t have that luxury. Everything’s happening immediately without preparation,’ she said. There is also the potential that the CBP could see a net revenue loss if the cost to collect those duties is higher than the revenue that’s collected.”
Speaking with the Post, she added
“Had the China and Hong Kong mail suspension remained in effect, the Postal Service would have had towork with its Chinese counterparts to put in place new de minimis customs screening procedures, Muth said. ‘It’s totally upended the industry, and folks are kind of scrambling to comply and still have a lot of questions about how it’s going to work.’”
Reuters noted comments from trade executives that reflected the confusion:
“We’re all running around like headless chickens at this moment in time, trying to second-guess what’s going to happen. And in two weeks’ time we may be back to normal.”
“There has really been absolutely zero time for anyone to prepare for this. What we really need is direction from the government on how to handle this.”
“The problem is not with the Postal Service. The problem is with Customs. They are not prepared for what’s happening.”
Though trade policy and the loss of potential import duties because of the de minimis exemption were clear motives for the administration’s action, others noted that the absence of individual inspection for de minimis items was seen as a loophole by drug traffickers who brought fentanyl and other materials into the US unscreened.
The Post reported how politicians sought to spin the situation for their respective purposes:
“President Trump is ensuring that China can no longer avoid applicable tariffs simply by exporting packages with relatively low values,” Rep. Jason T. Smith (R-Missouri), the House Ways and Means Committee chair, said in a statement Tuesday, before the Postal Service reversed course. The Ways and Means Committee has spent significant time investigating the use of de minimis by China and other nations to undermine our trade enforcement tariffs and skirt compliance with US law. The effect of increased abuse of the de minimis privilege has been to deny the US Government collection of billions of dollars in additional revenues while unfairly disadvantaging American manufacturers.”
“The one consistency of Trump’s trade war is the lack of foresight. This would be easily avoidable if anyone knew what they were doing and proves yet again why our trade policy must come from the Congress,” Rep. Richard E. Neal (Massachusetts), the top Democrat on the House Ways and Means Committee, told The Post.”
Smith may have a point that significant potential import duties are being avoided by foreign shippers, albeit legally under the current de minimis provision. (Whether “American manufacturers” could produce and ship at competitive prices what’s being imported from low-cost producers overseas is another matter.)
Neal also makes a good point, however, in that the way in which the policy was implemented was less than carefully planned, and failed to allow adequate preparation. As Muth had noted in her comments, had whatever the administration wanted to do been managed through the usual notice-and-comment rulemaking process, the agencies involved – notably USCBP and the Postal Service – as well as private shippers would have had the opportunity to figure out what to do, as well as how and with what resources to do it, before being thrown into implementing the new policy. Shoot-ready-aim is not the way to do business.
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