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China files WTO complaint, seeks tariff consultations with

US

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WTO rulings on past Trump tariffs brought no relief to

Beijing

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Low-value package imports face increased scrutiny,

processing

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US Customs official warns undocumented packages may be

turned

back

By David Lawder

WASHINGTON, Feb 5 (Reuters) - China filed a World Trade

Organization complaint on Wednesday against U.S. President

Donald Trump's new 10% tariff on Chinese imports and his

cancellation of a duty-free exemption for low-value packages,

arguing the actions are "protectionist" and break WTO rules.

Beijing's request for U.S. trade consultations came as

confusion reigned among shippers and retailers over Trump's

closure of the "de minimis" exemption for package imports valued

under $800 and widely used by e-commerce firms including Shein,

Temu and Amazon ( AMZN ).

A Customs and Border Protection official said all small

packages from China and Hong Kong needed to have customs entries

on file prior to arrival and there was the potential for some

cargo to be sent back without this paperwork.

The WTO said China submitted a request for consultations

with the U.S. on the tariffs. China argues in the document that

Trump's new duties aimed at halting the flow of fentanyl opioids

and their precursor chemicals to the U.S. "are imposed on the

basis of unfounded and false allegations concerning China."

It said the duties are discriminatory, only applying to

goods of Chinese origin, and are inconsistent with the U.S.'s

WTO obligations.

The request for consultations is the start of a dispute

process that could lead to a ruling that Trump's duties violated

trade rules in the same manner that a 2020 WTO ruling found that

his first-term China tariffs broke trade regulations.

But such a victory would be unlikely to bring Beijing relief

because the WTO's Appellate Body has been largely inoperable for

years, as the U.S. has blocked the appointment of appellate

judges over what it views as judicial overreach by the body.

This has prohibited a final decision in the 2020 case.

PACKAGE CHAOS

The U.S. Postal Service said on Wednesday it would again

accept parcels from China and Hong Kong, reversing a temporary

suspension that threatened to disrupt millions of package

imports every day.

"We're all running around like headless chickens at this

moment in time, trying to second-guess what's going to happen,"

said Martin Palmer, co-founder of Hurricane Commerce, a

cross-border e-commerce data provider. "And in two weeks' time

we may be back to normal."

The Trump administration has blamed the de minimis exemption

for allowing fentanyl and its precursor chemicals to enter the

U.S. unscreened. Recent Reuters reporting has also found that

drug traffickers are exploiting the exemption.

USPS said in a statement it was working with the U.S.

Customs and Border Protection agency to implement an efficient

collection mechanism for the new China tariffs to minimize

disruptions to deliveries.

NO TRUMP-XI TALKS

On Wednesday, there was still no call scheduled between

Trump and Chinese President Xi Jinping to discuss the new U.S.

tariffs and Beijing's retaliatory measures, a person familiar

with the matter told Reuters.

Trump said on Tuesday he was in no hurry to speak with

Xi as the tariff took effect just after midnight Eastern Time.

China responded with targeted tariffs on imports of U.S.

coal, liquefied natural gas, crude oil and farm equipment, and

opened an anti-monopoly investigation into Alphabet's

Google.

The launch of the new trade war caught the retail and

shipping sectors flat-footed.

"There has really been absolutely zero time for anyone to

prepare for this," said Maureen Cori, co-founder of New

York-based consultancy Supply Chain Compliance. "What we really

need is direction from the government on how to handle this

without warning or notice."

Currently, de minimis parcels are consolidated so customs

can clear hundreds or thousands of shipments at once, but they

will now require individual clearances, significantly increasing

the burden for postal services, brokers and customs agents, Cori

said.

The provision was initially intended as a way to streamline

trade, and its use has surged with the increase in online

shopping.

About 1.36 billion shipments entered the United States using

the de minimis provision in 2024, up 36% from 2023, according to

U.S. Customs and Border Protection (CBP) data.

TARIFF UNCERTAINTY

U.S. Treasury Secretary Scott Bessent on Wednesday defended

Trump's tariff strategy in his first media interview since

taking office, saying it was aimed at bringing manufacturing

back to the U.S., including for industries that have largely

left U.S. shores.

U.S. Federal Reserve officials on Wednesday pointed to

the large policy uncertainty around tariffs and other issues

arising from the early days Trump's administration as among the

top challenges in figuring out where to take U.S. monetary

policy in the months ahead.

Chicago Fed President Austan Goolsbee warned that ignoring

the potential inflationary impact of tariffs would be a mistake,

whereas Richmond Fed President Thomas Barkin said it remains

impossible at this early stage to know where cost increases from

any tariffs might be absorbed or passed along to consumers.

(Reporting by David Lawder; Editing by Lincoln Feast.)