*

Closing de minimis provision will affect Shein, Temu,

Amazon

Haul shipments

*

Experts doubt significant impact on Chinese e-commerce

volumes

*

SF Express, FedEx ( FDX ) continue to offer courier services to US

*

Four million de minimis packages sent to US per day in

2024,

analyst says

(Adds expert comments in paragraphs 5-6)

By James Pomfret, Lisa Barrington and Casey Hall

HONG KONG/SEOUL/SHANGHAI, Feb 5 (Reuters) - The U.S.

Postal Service said it would temporarily suspend parcels from

China and Hong Kong, after President Donald Trump ended a trade

provision this week used by retailers including Temu and Shein

to ship low-value packages duty-free to the U.S.

The Trump administration imposed an additional 10% tariff on

Chinese goods that came into effect on Tuesday and moved to

close the "de minimis" exemption that allows U.S. shoppers to

avoid paying tariffs for shipments below $800.

The extra tariff and the elimination of de minimis follow

repeated warnings by Trump that Beijing was not doing enough to

halt the flow of fentanyl, a dangerous synthetic opioid, into

the U.S.

Reuters reported previously that Chinese suppliers use the

duty-free provision to export chemical materials for fentanyl by

disguising them as gadgets and other low-cost goods.

"This is huge... People waiting for orders from Amazon ( AMZN ),

Shein and Temu have no way of knowing when they can receive

those orders," said Ram Ben Tzion, founder of Ultra Information

Solution, the firm behind digital shipment vetting platform

Publican.

"I do expect this to be a short-term measure replaced by a

longer term measure that will be more measured," he said.

USPS said the change will not impact the flow of letters and

'flats' - mail that can be up to 15 inches (38 cm) long or 3/4

inches (1.9 cm) thick - from China and Hong Kong. It did not

immediately comment on whether this was tied to Trump's change

to ending de minimis shipments from China and other countries.

"The USPS would require some time to sort out how to

execute the new taxes before allowing Chinese packages to arrive

in the U.S. again," said Chelsey Tam, a senior equity analyst at

Morningstar.

"This is a significant challenge for them because there were

4 million de minimis packages per day in 2024, and it is

difficult to check all the packages - so it will take time."

At a Hong Kong post office, a businessman who had come to

check the status of a package he sent to the U.S. earlier

expressed frustration after a staffer told him it wasn't

possible to ascertain where his delivery might be now.

"This political war is affecting the local people, not just

in Hong Kong but in other places too. It's very disturbing for

us," John Khan, who has run a trading business for nearly 30

years, told Reuters.

GREATER SCRUTINY

Logistics provider Easyship warned clients who regularly

send sub-$800 shipments to the U.S. were likely to face much

greater scrutiny and advised them to set up distribution centres

within the U.S., partner with a local warehouse or U.S.

fulfillment centre.

Some other international couriers including FedEx ( FDX )

and SF Express, China's largest express delivery company, said

they continue to send packages to the U.S.

Fast-fashion retailer Shein and online dollar-store Temu,

both of which sell products ranging from toys to smartphones,

have grown rapidly in the U.S. thanks in part to the de minimis

exemption.

The two firms together likely accounted for more than 30% of

all packages shipped to the United States each day under the de

minimis provision, the U.S. congressional committee on China

said in a June 2023 report.

Nearly half of all packages shipped under de minimis come

from China, according to the report.

Shein and Temu did not immediately reply to a request for

comment.

"Doing the paperwork for customs declarations was not

something these companies had to deal with very often before,"

said Basile Ricard, operations director at Ceva Logistics

Greater China.

"So this is a very new process for them. If this remains

largely manual process it will be incredibly difficult... It's

really not clear for us at this stage how they are going to

manage that."

Amazon ( AMZN ) also has a large seller base in China, with

e-commerce consultancy Marketplace Pulse estimating in February

that China-based sellers represent nearly half of the top 10,000

sellers on Amazon ( AMZN ) in the U.S. Amazon ( AMZN ) did not immediately respond

to a request for comment.

In November, the U.S. company set up Amazon Haul to allow

shoppers to purchase $5 handbags and $10 sweaters from

China-based sellers.

DELAYS IN DELIVERIES

Trump's crackdown on de minimis would make the products sold

by the likes of Shein and Temu more expensive but is unlikely to

dramatically impact shipment volumes, experts said.

"E-commerce volumes out of China grew 20-30% last year, so

it's going to take a sledgehammer to crack that level of

consumer demand and I'm not sure de minimis alone is enough,"

said Niall van de Wouw, Chief Airfreight Officer at freight

platform Xeneta.

"They will still be cheaper than buying through retailers in

the U.S. Delays in receiving the goods due to operational

disruptions could have a bigger impact than price."

Shein has previously said it supports reform of the de

minimis provision.

Both Temu, a subsidiary of Chinese e-commerce giant PDD

Holdings ( PDD ), and Singapore-headquartered Shein, which plans

to list in London this year, have taken measures such as

sourcing more products from outside China, opening U.S.

warehouses and bringing more U.S. sellers on board, to mitigate

the impact.

In what would be another blow to the two China-founded

e-commerce platforms, the U.S. is discussing whether to add

Shein and Temu to the Department of Homeland Security's 'forced

labor' list, Semafor reported on Tuesday.

(Reporting by Chandni Shah in Bengaluru, Casey Hall, Brenda Goh

in Shanghai, Lisa Barrington in Seoul, Lisa Baertlein in Los

Angeles, Anne Marie Roantree, Clare Jim, James Pomfret, Jessie

Pang in Hong Kong, Greg Bensinger in Washington; Writing by

Miyoung Kim; Editing by Lincoln Feast and Shri Navaratnam.)