The United States Postal Service has reversed its decision to temporarily suspend inbound packages from China and Hong Kong, citing coordination with U.S. Customs and Border Patrol to implement an efficient tariff collection mechanism. This change follows significant trade policy shifts, including new tariffs imposed by the U.S. government. Additionally, China has responded with retaliatory tariffs on U.S. goods, including coal, natural gas, crude oil, agricultural machinery, and automobiles. China has also initiated an antitrust investigation into U.S. firms while imposing export controls on critical materials for semiconductor production.
Key Highlights
- USPS will continue accepting inbound mail and packages from China and Hong Kong. The change follows an initial USPS suspension tied to the closing of the de minimis exemption for low-value shipments.
- Customs and Border Patrol will oversee tariff collection on affected shipments.
- Ongoing trade tensions include new Chinese tariffs on U.S. goods and an antitrust probe into U.S. firms.
- China has imposed new tariffs on U.S. coal, natural gas, crude oil, agricultural machinery, and automobiles.
Detailed Analysis
USPS Policy Reversal
On February 5, 2025, the USPS announced it would continue accepting all inbound international mail and packages from China and Hong Kong. This decision reversed a temporary suspension announced late on February 4, 2025, which was likely intended to allow time for tariff enforcement mechanisms to be put in place. The USPS stated that it is working closely with U.S. Customs and Border Patrol to implement an efficient tariff collection system to minimize disruption to package delivery.
Initial Suspension and De Minimis Exception
The initial USPS suspension coincided with the closing of the de minimis exemption, which previously allowed packages valued under $800 to enter the U.S. duty-free. The new tariffs now require all inbound packages from China and Hong Kong to undergo customs processing and be subject to applicable duties.
Chinese Government’s Response
During a daily press briefing on February 5, 2025, Chinese Foreign Ministry spokesperson Lin Jian criticized the USPS decision, alleging that the U.S. government is politicizing trade and suppressing Chinese companies. Lin warned that China is prepared to take necessary steps to defend its trade interests, though no specific countermeasures were disclosed.
Broader Trade Implications
The USPS policy shift is part of a larger trade confrontation between the U.S. and China:
- China has announced retaliatory tariffs on U.S. goods, effective February 10, 2025. Additional duties of 15% will be imposed on coal and natural gas imports, while crude oil, agricultural machinery, and automobiles will face 10% tariffs.
- China has initiated an antitrust investigation into Google and added U.S. firms PVH Group (parent company of Tommy Hilfiger and Calvin Klein) and biotech firm Illumina to its “unreliable entity list.”
- China has imposed export controls on rare earth minerals and critical materials for semiconductor production.
Industry and Market Reactions
- Stock Market: U.S. stock futures remained largely flat on February 4, with the Nasdaq up 0.1% and the S&P 500 up 0.01% in premarket trading.
- European Response: European Commission President Ursula von der Leyen addressed the threat of new U.S. tariffs on the EU, stating the bloc is prepared for “tough negotiations” while also emphasizing the importance of transatlantic trade relations.
- China’s Legal Actions: China has filed a lawsuit with the World Trade Organization (“WTO”), asserting that the new U.S. tariffs violate international trade rules.
What This Means for Businesses
Businesses engaged in U.S.-China trade should prepare for increased customs scrutiny and potential delays in package processing. Companies relying on Chinese imports may need to reassess supply chain strategies to account for the new tariff landscape. Stakeholders should also monitor further retaliatory measures from Beijing and legal developments at the WTO.
For further guidance on how these changes may impact your business, please contact Mike Burke and Allison Raley. AGG will continue to monitor developments and will update as needed.