"For many high-margin products, even with a 100% tariff, the cost of manufacturing in China is still far lower than local production. Therefore, from a business perspective, high-margin products will become a more prominent focus in cross-border trade. Companies should adjust their strategies to adapt to the new market environment." — Founder of a cross-border brand, interviewed by EqualOcean.
On February 4, 2025, the United States Postal Service (USPS) announced a suspension of parcels from mainland China and Hong Kong (excluding letters and regular mail). Just one day later, the agency reversed its decision and announced it would continue accepting these parcels. USPS did not provide an explanation for the reversal of this decision.
As speculated by the public, this decision is closely tied to the new tariff policy implemented by the Trump administration on the same day. The policy abolished the tariff exemption for packages valued under $800 (the "de minimis" exemption) and imposed additional tariffs ranging from 10% to 60%, directly affecting Chinese e-commerce platforms such as Temu and SHEIN, as well as many small and medium-sized e-commerce sellers operating in the U.S. Data shows that, in 2024, 48% of Chinese goods entering the U.S. were through the "de minimis" exemption, with Temu and SHEIN accounting for 30%.
Although some analysts point out that USPS’s suspension of parcels may be more of a symbolic gesture, given that approximately 90% of cross-border parcels in the U.S. are transported by private logistics companies such as SF Express and UPS, Chinese e-commerce stocks still saw a general decline following the USPS announcement. JD.com’s stock in Hong Kong dropped by over 5%, Alibaba saw a 0.1% dip, and EDA Group experienced a more severe drop of 11.47%.
Since the Trump administration took office, curbing trade exchanges between China and the U.S. has become one of its key policies. Analyzing the impact on cross-border e-commerce and sellers, as well as developing response strategies, is now a key focus for EqualOcean in providing insights to our readers.
Potential Crisis: The Hidden Concerns of Chinese Cross-Border E-commerce and Sellers Behind the Suspension Event
Uncertain trade policies drive up logistics costs and delivery times
With the cancellation of the "de minimis" exemption policy, cross-border e-commerce sellers are facing a significant increase in tax burdens. Previously duty-free low-cost packages now face high tariffs. For example, a piece of clothing priced at $50, subject to a 20% tariff, will require consumers to pay an additional $10, which undoubtedly weakens the price advantage of Chinese e-commerce platforms. In response to the tariff pressure, some merchants have adopted a price increase strategy, raising product prices by 20%-30% to cover costs. However, higher prices may directly suppress consumer demand, leading to a decline in order volume and, consequently, affecting overall sales performance.
The new policy mandates that all cross-border packages undergo formal customs declaration, eliminating the fast-track duty-free channel. This change not only lengthens the customs clearance time (with an expected delay of 1-2 days) but also places higher financial demands on sellers. According to reports from 21st Century Business Herald, Yuntu Logistics has required sellers to pay a one-time fee of 20 RMB per order and prepay a 30% customs duty deposit based on the estimated value of the goods. This means sellers need to invest more funds before the goods are delivered, significantly increasing cash flow pressure. For businesses that rely on low-cost operations and high-volume sales, this adjustment undoubtedly adds to the operational burden.
The USPS plays a critical role in the direct mail model for cross-border e-commerce, but the brief suspension of accepting Chinese packages has exposed its operational instability, forcing sellers to reassess their logistics plans and further raising operational costs. For cross-border e-commerce businesses that rely on price competition, the rise in logistics costs undoubtedly poses a major challenge.
The Operational Pressure on Cross-Border E-Commerce Platforms and Sellers
Although the USPS suspension of package acceptance was brief, its impact on cross-border e-commerce sellers remains significant. Many platforms that rely on the low-cost advantage of USPS, especially those dealing with light and small items, now face the risk of package delays. Due to USPS’s cost-effective shipping rates, these sellers will encounter difficulties finding alternative courier services, and increased logistics delays and costs will severely affect their operations.
E-commerce platforms that rely on direct shipping from China, such as Temu and Shein, have rapidly risen due to their low-price strategy. However, with the increase in tariff costs, this model now faces significant challenges, and profit margins are expected to decline by 5%-8%. Some sellers are attempting to circumvent the policy by using third-party shipping channels, such as first shipping goods to Southeast Asian countries before forwarding them to the U.S. However, this approach not only adds more logistics steps, leading to longer delivery times, but it also carries compliance risks.
Additionally, Chinese small and medium-sized sellers operating on Amazon have been forced to adjust their logistics models, transitioning to overseas warehouses to avoid high tariffs. However, the overseas warehouse model involves inventory management, warehousing costs, and additional shipping fees, which pose significant challenges for small and medium-sized sellers with limited capital. Some sellers may even be forced to exit the U.S. market due to the pressure of increased costs.
Political Struggle or Economic Balance? The Deep Drivers of U.S. Trade Policy Adjustments
The Trump administration officially canceled the small-value exemption policy and imposed additional tariffs on relevant goods, citing the need to "combat the unfair competitive advantage of Chinese e-commerce." The U.S. government argued that Chinese cross-border e-commerce platforms have long exploited this policy to bypass tariffs, allowing a large number of Chinese products to enter the U.S. market at low cost, thereby undermining local retailers and manufacturers.
In addition to economic factors, some U.S. politicians have accused China of using the exemption policy to import "illegal goods" into the U.S., even linking the issue to the fentanyl crisis, in an attempt to leverage national security and public health concerns to justify the need for policy adjustments. Although there is currently no concrete evidence supporting these allegations, such rhetoric has already had an impact at the political level, further driving the U.S. government to tighten regulations on Chinese cross-border e-commerce.
Responding to the New Industry Normal: From USPS Suspension to Supply Chain Localization Strategies
The recent adjustment in U.S. trade policy reflects a significant shift in the global cross-border e-commerce industry. Based on research experience and interviews with industry professionals, EqualOcean provides the following recommendations to cross-border e-commerce practitioners:
Firstly, in the face of unstable cross-border logistics, cross-border e-commerce companies should accelerate the deployment of overseas warehouses, pre-stock goods in these warehouses to improve logistics efficiency and reduce the uncertainty caused by customs clearance and tariff policies. For example, Temu has already implemented a “semi-managed model,” where sellers store products in the platform’s overseas warehouses, and the platform handles fulfillment and delivery. Shein, on the other hand, has further expanded its overseas warehouse network to enhance the flexibility of its localized supply chain. This not only helps shorten delivery times but also enhances inventory management capabilities and improves user experience.
If heavily reliant on international logistics, Chinese cross-border e-commerce companies should also seek more flexible logistics solutions. Sellers can choose international private logistics providers such as UPS, FedEx, or DHL to ensure smooth logistics channels. Additionally, exploring third-country transshipment models can help mitigate the risks directly affected by policy changes.
Moreover, as the uncertainty of U.S. trade policies increases, cross-border e-commerce companies should begin to seek diversified market strategies to reduce dependency on the U.S. market. EqualOcean advises cross-border e-commerce companies and small to medium-sized sellers to seize market opportunities in Southeast Asia, Latin America, and the Middle East by leveraging localized operations and the growing trend of social e-commerce.
In the context of tightening tariff policies, cross-border e-commerce platforms should gradually adjust their product structure by reducing reliance on low-priced, duty-free goods and shifting toward higher-margin, higher-value products. For example, jewelry, smart devices, and home goods—products with higher unit prices and added value. According to the founder of a cross-border e-commerce company in an interview with EqualOcean, some Chinese products, even after being subjected to higher tariffs, remain more competitive than locally produced goods. This strategy will not only help e-commerce platforms increase overall profitability but also strengthen their ability to withstand risks in cross-border markets, ensuring stable growth amidst global trade environment changes.
Conclusion
In an increasingly complex global trade environment, cross-border e-commerce companies need to adopt more flexible logistics strategies, diversify market layouts, and optimize product structures to reduce dependency on a single market and enhance overall risk resilience. For example, by expanding into emerging markets such as Southeast Asia, Latin America, and the Middle East, companies can mitigate market risks and avoid excessive reliance on the U.S. market, thus reducing vulnerability to policy fluctuations. Additionally, optimizing product structures—by decreasing dependence on low-priced, duty-free goods and shifting towards higher-value, higher-margin product lines—is also an essential direction for improving competitiveness.
In the face of future uncertainties, cross-border e-commerce must embrace forward-thinking strategies, closely monitor changes in international trade policies, and quickly adjust operational strategies. Only by simultaneously strengthening compliance, brand development, market diversification, and supply chain optimization can companies maintain a competitive edge in the intense global marketplace and ensure long-term sustainable growth.