China’s Cross-Border E-Commerce Faces Disruption from Trump’s Steep Tariffs on Small Parcels
By Sun Yanran, Bao Yunhong and Denise Jia
Donald Trump has sharply escalated trade tensions with China, announcing a steep increase in tariffs on small parcels valued under $800 just days after Beijing retaliated with its own 34% tariff hike. The move poses major challenges for China’s cross-border e-commerce exporters.
Starting May 2, goods from the Chinese mainland and Hong Kong will no longer enjoy duty-free treatment. Instead, shipments will face a 30% tax or a minimum $25 duty, with tariffs climbing to $75 between May 2 and June 1, and reaching $150 after June 1. The effective tax rate on small parcels will jump from 30% to 90%, nearly matching the 104% levy on traditional foreign trade goods.
The move came after the U.S, President’s April 2 announcement that overall U.S. tariffs on Chinese imports would rise to 54%, with the measures expected to take effect on April 9.
The latest escalation threatens to disrupt China’s booming cross-border e-commerce sector, which has thrived on shipping low-cost small parcels directly to U.S. consumers. Platforms such as Shein, PDD Holdings’ Temu, Alibaba’s AliExpress, and TikTok Shop have built rapid-growth models around this “full-service” approach — handling everything from listings and logistics to after-sales support for small merchants.
PDD told Caixin that full-service operations are just one part of its cross-border strategy, and that it is exploring alternative models — including semi-managed services — to adapt to changing conditions.
Meanwhile, Chinese exporters are scrambling to respond. Anker Innovations Co. Ltd., China’s largest cross-border seller of consumer electronics, said it has formed a task force to monitor the situation and devise countermeasures. The company is accelerating shipments to U.S. warehouses to cushion short-term cost impacts and is actively expanding production and supply chain facilities outside China to secure long-term competitiveness. It’s also cutting costs across its entire supply chain and exploring growth in emerging markets such as Europe, Southeast Asia, Australia and Latin America.
Faced with rising supply chain costs, many exporters are planning price increases. Yang Wei, general manager of Jinchan Curtains, a major Chinese curtain manufacturer with 30% of its exports bound for America., told Caixin the company would pass on higher costs to consumers, even if it risks losing 20% or 30% of its U.S. orders.
Zhang Zhanjiang, a seller of photography backdrops, said sellers on e-commerce platforms face fierce price competition and may be reluctant to raise prices first. However, independent sellers and brand owners targeting international markets may be better positioned to absorb price hikes, especially if they use overseas warehouses to cut costs.
In the longer term, exporters are expected to shift further toward overseas warehousing. Zhang noted that consolidating shipments through foreign warehouses reduces customs and operational fees compared with direct shipping. Some companies are even considering local production in the U.S. to lower tariff exposure, although high labor and land costs make that option difficult.
Yang Rong, head of Shenzhen Xiangfeiyang Technology, said relocating manufacturing to the U.S. is not viable due to high costs and low local productivity. Instead, the company relies on its American warehouse to manage distribution.
The tougher trade rules also heighten risks for firms that have long relied on gray channels — such as underreporting shipment values or misclassifying goods — to minimize duties. A Chinese apparel seller told Caixin that small-parcel exporters previously exploited the $800 exemption to ship goods directly to U.S. consumers and would now probably underdeclare values to dodge steep tariffs.
However, with U.S. customs authorities stepping up scrutiny of Chinese shipments, the risk of getting caught — and facing costly delays — has grown. The crackdown could force Chinese sellers to move toward more compliant, large-volume logistics models over time.
Amid rising uncertainty, exporters are being urged to diversify their global footprint. Yang emphasized the importance of expanding into markets such as Southeast Asia, the Middle East, South America and Australia, while warning that many emerging markets are also grappling with higher tariffs.
Contact reporter Denise Jia (huijuanjia@caixin.com)
caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Global Neighbours is authorized to reprint this article.
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