'Removal of de minimis exemption a blow for retailers' - RTHK
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'Removal of de minimis exemption a blow for retailers'

2025-02-06 HKT 15:35
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  • Cheap fashion retailers, such as Temu and Shein, are expected to take a hit due to the new US tariffs. File photo: Reuters.
    Cheap fashion retailers, such as Temu and Shein, are expected to take a hit due to the new US tariffs. File photo: Reuters.
The scrapping of America’s de minimis exemption for the import of small goods will deal a blow to small cross-border retailers, increase burdens on consumers, while shaking Hong Kong's status as an international logistics centre, according to analysts and industry insiders.

On Monday, the White House announced it would end the de minimis exemption which allowed low-value packages, under US$800, to be shipped to America duty-free.

The end of the exemption was a result of the additional 10 percent tariff on Chinese goods ordered by US President Donald Trump.

The removal of the exemption means that goods from Chinese retailers, especially e-commerce players like Shein and Temu, are now subject to the additional US duties on Chinese imports.

Speaking on RTHK's Backchat programme on Thursday, Alan Lung, political analyst and co-convenor of The Path of Democracy, said the removal of the exemption would affect the SAR as well as small mainland shippers.

"A lot of the small parcels that are shipped through e-traders, like Temu and Shein, are shipped through Hong Kong. The scrapping of the US$800 exemption simply increases the costs to consumers and makes it more complicated for custom clearances," he said.

"Companies like Alibaba are not really affected because their warehouses in the US, and they have their own customs clearances in blocks, it's the smaller shippers that will go bust," he added.

Platforms like Shein and Temu have become enormously popular in the US in recent years due to their budget-friendly products, and a US congressional report showed that over 80 percent of American e-commerce shipments in 2022 were from de minimis imports.

Echoing Lung, Aditya Halan, Chief Technology Officer at Floship, an e-commerce and logistics service provider based in the SAR, said on the same programme that some logistics companies in the region have already increased their fees - due to the tariff changes and general business uncertainties.

"A lot is changing by the day. So everybody is trying to be secure... to put on a random block on the amount, and we commit as we pay back as actuals later on," he said.

Halan also warned that such tariff hikes could hinder the SAR's status as a global logistics centre in the long term, as brands look for ways to manufacture their products elsewhere, away from the mainland, to skip the tariff duties.

"If the brands start manufacturing outside China, the logistics will follow that trend as well, so many people will start setting up logistics hubs elsewhere, then there will be a risk for Hong Kong as a logistic centre.”

'Removal of de minimis exemption a blow for retailers'