Trump Slashes China Parcel Tariff Amid Trade War Pause — Critics Say Move Favors Foreign Retail Giants.
In a controversial reversal, Donald Trump has signed an executive order to cut the U.S. tariff on small parcels from China and Hong Kong from 120% to 54%, just weeks after hiking it in a show of force against foreign imports. The reduction, announced shortly after a 90-day ceasefire in the ongoing trade war between Washington and Beijing, is already drawing backlash for disproportionately benefiting Chinese fast-fashion giants like Shein and Temu—while offering little to struggling American manufacturers.
The tariff, initially introduced in May to shut down the so-called “de minimis loophole,” targeted shipments under $800 that previously entered the U.S. duty-free. These low-value parcels, often sent directly to consumers, helped fast-fashion empires thrive while skirting import regulations. Critics have long argued the loophole undermined American labor, encouraged exploitative supply chains abroad, and turned the U.S. postal system into a logistics arm for Chinese e-commerce platforms.
Trump’s original 120% tax, though aggressive, was heralded by some as a step toward leveling the playing field. His decision to now walk it back—cutting the rate by more than half—has sparked accusations of inconsistency and political showmanship.
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The flat fee alternative of $100 per parcel remains in place, but the administration scrapped a scheduled hike to $200 in June. Meanwhile, the broader U.S.-China tariff rollback reduces overall import duties between the nations by 115 percentage points—down to 30% for Chinese imports and 10% for American goods entering China. “They’ve agreed to open up China,” Trump declared at a White House press conference, but many analysts say the real winners are Chinese retailers, not American workers.
Financial markets responded with initial optimism: Wall Street ticked upward, and European shares rose modestly. But economists and trade experts warn that the temporary truce lacks substance. “Uncertainty over what happens after the 90-day pause will keep many companies in wait-and-see mode,” noted Swissquote Bank analyst Ipek Ozkardeskaya, emphasizing that the lack of a long-term resolution creates instability for manufacturers and investors alike.
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The de minimis rule, originating in the 1930s to ease travel customs restrictions, has become a lightning rod for bipartisan criticism. More than 90% of U.S.-bound parcels now use the rule to bypass scrutiny, with roughly 60% originating from China. Lawmakers on both sides of the aisle have demanded stricter controls, especially amid growing concerns that de minimis shipping channels are being exploited to import illegal substances such as fentanyl.
Despite that, Trump’s sudden pivot appears more political than strategic, raising questions about whether the administration is caving to pressure from big retailers and Chinese lobbyists. U.S. businesses struggling to compete with China’s heavily subsidized exports have been left bewildered. While companies like UK-based Revolution Beauty—whose China-made products comprise 60% of their U.S. sales—celebrated the rollback, small American brands are left to bear the brunt of Trump’s erratic trade policies.
Although Bank of America reports a growing belief in a “soft landing” for the U.S. economy—with 61% of fund managers feeling optimistic—the decision casts doubt on whether Trump is truly interested in defending American industry or merely chasing short-term market gains.
Trump’s tariff flip-flop reeks of political opportunism, not economic strategy. By reversing course to favor foreign platforms like Shein and Temu, the administration sends a clear message: cheap imports trump American jobs. While Trump paints this as a diplomatic victory, the reality is far bleaker—an unstable, superficial pause that helps overseas billionaires more than working-class Americans. As with many of his headline-grabbing moves, this one seems destined to unravel under scrutiny.
