President Trump’s suspension of tariffs on small packages from China valued under $800 has undergone a reversal. As of February 5th, the U.S. Postal Service announced that it will “continue accepting all international inbound mail and packages from China and Hong Kong Posts”. Here is a quick dive into what we know.
The Suspension
The temporary suspension of tariffs will remain until a system to collect tariff revenue is established by the United States Commerce Secretary. This suggests that the Trump administration is working towards organizing a more efficient method for managing and collecting tariffs on these imports to ensure as little disruption to the delivery process as possible.
Broader Tariff Actions
This development occurs amidst other tariff changes such as the imposing and suspension of tariffs on goods from Mexico and Canada. At the time of this writing, according to Forbes, Trump has signed a memo directing his administration to review and determine “reciprocal tariffs” on a country-by-country basis. This review could take up to “weeks or months” to complete, meaning no tariffs are expected to be imposed any time soon.
Background
The United States had already started re-examining package exemptions before Trump entered office. Back in September, the Biden administration aimed for stricter import rules to help United States businesses and tackle illicit drug shipments, particularly fentanyl. In 2016, the United States increased the tariff exemption threshold from $200 to $800, but the number of small packages has since surged. The quantity of packages entering the United States under the $800 limit has risen from 140 million to over 1.3 billion in the past year.
What This Means
The changes in tariffs highlight the complexities of modern trade policy. While the suspension offers temporary relief, the long-term effects on businesses and consumers remain uncertain. Sectors affected by the planned Trump tariffs will stay informed on what they need to know and what to expect regarding US trade policies.
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