*

US Customs says it is prepared to handle new inspection

volume

*

Airlines, ocean vessel operators to collect new duties on

parcels

*

Duties to be collected before goods are shipped out of

China and

Hong Kong

*

Shipping industry concerned about renewed delays,

disruptions

(Adds details on informal entry in paragraph 20, no reports of

disruptions in paragraph 23)

By David Lawder and Lisa Baertlein

WASHINGTON/LOS ANGELES, May 2 (Reuters) - The Trump

administration ended U.S. duty-free access for low-value

shipments from China and Hong Kong on Friday, removing the "de

minimis" exemptions availed of by Shein, Temu and other

e-commerce firms as well as traffickers of fentanyl and other

illicit goods.

The action restores an executive order from President Donald

Trump in February that was quickly suspended due to a lack of

screening procedures for sub-$800 shipments that sparked chaos

at airports and caused millions of packages to pile up.

U.S. Customs and Border Protection has "a massive task at

hand" but is ready to handle the enforcement and collection of

Trump's tariffs on small Chinese shipments, a spokesperson for

the agency said.

"We are prepared and equipped to carry out enhanced package

screening and enforce orders effectively as outlined" in Trump's

executive order ending de minimis treatment for China, the

spokesperson added.

The new procedures should not affect passenger wait times at

airports and ports of entry, the spokesperson said.

Under CBP's latest guidance, shipments from China and Hong

Kong regardless of size will now be subject to Trump's new

tariffs of 145% plus any prior duties, except for products such

as smartphones which were excluded last month. These will

largely be handled by express shippers such as FedEx ( FDX ),

United Parcel Service ( UPS ) or DHL, which have their

own cargo handling facilities.

Items valued at up to $800 and sent from China via postal

services are treated differently. They are now subject to a tax

of 120% of the package's value or a flat fee of $100 per package

- an amount that rises to $200 in June.

FORMAL ENTRY SHIFT

However, CBP temporarily suspended a rule that would have

required formal customs entry for all shipments valued at over

$250 containing goods that are also subject to punitive tariffs.

This would have raised costs significantly for shippers but

logistics experts said the suspension will make tariff

enforcement harder.

Formal customs entry, normally associated with larger,

containerized cargo, requires detailed tariff code information,

advance electronic transmission of entry data, recipient tax

identification - potentially a social security number - and a

bond to cover for customs liability.

And it would have applied to many other countries now

subject to U.S. tariffs imposed by Trump, creating a potential

new crush of administrative paperwork for shippers.

Under the suspension, the much simpler informal entry

procedures can be used for most packages valued at up to $2,500,

including those handled by commercial shippers UPS, FedEx ( FDX ) and

DHL.

For postal service mail shipments from Hong Kong and

China, the formal entry threshold drops to $800, the previous de

minimis level, and are subject to full tariffs.

The lack of detailed information under informal entry,

including full tariff codes, will make it "next to impossible"

to screen packages for illicit goods such as fentanyl chemicals,

said Ram Ben Tzion, CEO of Publican, a digital shipping vetting

platform.

Trump ended the de minimis exemption for China largely

because it was being used for largely unscreened low-value

shipments containing fentanyl precursor chemicals into the U.S.,

a phenomenon documented in a Reuters series about fentanyl.

COLLECTIONS AT TAKE-OFF

The U.S. Postal Service said it would not be involved in any

duty collections. Instead, a USPS spokesperson said, airlines

and vessel operators would need to work with shippers and

Chinese postal authorities to pay the import taxes and show

proof before the goods are transported out of China or Hong

Kong.

Shippers were bracing for more package chaos, and some

questioned whether airlines were prepared to handle duty

collection from China Post and Hongkong Post.

"We have the same worry about bottlenecks," said Kate Muth,

executive director of the International Mailers Advisory Group

(IMAG), whose members include Amazon.com ( AMZN ), eBay ( EBAY )

and divisions of United Parcel Service ( UPS ), FedEx ( FDX ) and DHL.

The end of de minimis and high U.S. tariffs on Chinese goods

are likely to dent international air cargo traffic, which had

been surging as U.S. shoppers bought more from platforms like

Shein and Temu.

Although de minimis is a Latin term referring to matters

of little importance, low-value shipments from China to the U.S.

reached an estimated $5.1 billion in 2024, according to U.S.

Census Bureau data. That made it the seventh-largest U.S. import

category from China, behind video game consoles, but just ahead

of computer monitors.

De minimis packages account for around one-third of the

total air cargo tonnes coming to the U.S. from Asia, and that

trade volume could drop by 75% this year, Trade and Transport

Group estimates.

International air cargo traffic growth, which hit 12.3% last

year, could collapse to between -0.1% and 0.7% this year as

traffic from China to the U.S. stalls and the global economy

weakens, said Frederic Horst, managing director of Sydney-based

consultancy Trade and Transport Group.

"There's a lot of cancellations that are happening right now

for the next one or two weeks," Horst said.

Freighter flights are already down about 10% in the week

ending May 2, Cirrus Global Advisors founder Derek Lossing said,

noting that hefty U.S. tariffs on China likely played a role.

As of Friday afternoon, no major disruptions had been

reported.

Ultimately, CBP's enforcement decisions will determine how

smoothly the new policies are implemented, Lossing said. For

example, if CBP strictly enforces declared value that could

require inspections of more than 10,000 shipments per day.

"It could become chaotic very quickly."