US Tariff Hike on Chinese Goods Sparks Market Exodus, Price Surges
TEHRAN (Tasnim) - The United States’ abrupt termination of duty-free privileges for low-value Chinese imports has triggered a wave of retailer withdrawals and forced price hikes, exposing Washington’s trade strategy as a self-inflicted wound to both consumers and businesses.
Retailers are halting US shipments and scrambling for workarounds after the US revoked the “de minimis” tariff exemption for e-commerce packages valued under $800, specifically targeting Chinese and Hong Kong-origin goods.
The rule change, enacted under President Donald Trump’s directive, subjects most Chinese imports to tariffs of up to 145%, disrupting cross-border commerce and provoking a retaliatory response from Beijing.
British cosmetics seller Space NK has paused online orders to the United States to prevent “incorrect or additional costs” for customers, the company stated Wednesday.
Canadian brand Understance also announced on Instagram that it will cease US shipments until “clarity” emerges.
“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.
“I've seen a lot of small to medium-sized businesses just choose to exit the market altogether,” she said.
Tariff charges differ by delivery method. US Postal Service packages are currently taxed at 120% of value or $100 per item, set to increase to $200 in June, per Customs and Border Protection guidelines.
Retailers still operating in the US are raising prices.
British fashion brand Oh Polly increased its US prices by 20%, and may raise them further, said Managing Director Mike Branney.
Fast-fashion firm Shein, based in Singapore with most products made in China, told US customers via Instagram that “some products may be priced differently,” but claimed the majority remain “affordable.” The US is Shein’s largest market.
The end of de minimis also strips a low-friction import route often used by small businesses. Without it, importers face stricter requirements to disclose the manufacturing origin of each component, further escalating administrative costs.
UPS CEO Carol Tome noted many of the company's small business clients rely entirely on Chinese sourcing.
Etsy, the US online marketplace, issued guidance this month to help sellers clearly identify product origin, as tariffs apply based on where items are made, not where they’re shipped from.
Washington justifies the move by pointing to counterfeit concerns. In 2024, 97% of intellectual property seizure cases under Customs enforcement stemmed from de minimis shipments.
However, traditional retailers with no online presence, such as British fast-fashion chain Primark, could benefit from the fallout.
“With prices going up from this part of the trade, I wonder if some Americans might start going back to shopping centers to find value there,” said George Weston, CEO of Primark’s parent company Associated British Foods.
