*

Increased scrutiny, processing seen for all incoming

low-value

packages

*

New tariffs end duty-free status for sub-$800 shipments

from

China

*

Shippers, retailers confused over Trump tariff, customs

changes

*

Customs at New York's JFK airport put all packages from

China on

hold

(Adds CBP customs hold details in paragraphs 4, 22-24)

By Lisa Baertlein and Helen Reid

LOS ANGELES/LONDON, Feb 5 (Reuters) - The U.S. Postal

Service said on Wednesday it would again accept parcels from

China and Hong Kong, reversing a 12-hour suspension after

President Donald Trump scrapped an exemption used by retailers

including Temu, Shein, and Amazon ( AMZN ) to ship low-value

packages duty-free to the United States.

The about-face added to the growing confusion among

retailers and express shipping firms over how to deal with

Trump's new 10% tariff on imports from China and his closure of

the "de minimis" duty exemption for packages valued at under

$800, with the stated aim of stopping the flow of fentanyl and

precursor chemicals into the United States.

Major international shippers promised to maintain

deliveries, but disruptions may still occur as the USPS works

out how tariffs on small packages would be collected in tandem

with the U.S. Customs and Border Protection department.

FedEx ( FDX ), meanwhile, suspended its money-back guarantee

on overseas shipments as disruptions ripple through the supply

chain. Indeed, one logistics executive said CBP at New York's

John F. Kennedy (JFK) International Airport is putting a hold on

all incoming shipments from China until further notice.

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

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

And in two weeks' time we may be back to normal," said Martin

Palmer, co-founder of Hurricane Commerce, a cross-border

ecommerce data provider.

"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."

About 1.36 billion shipments entered the United States using

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

CBP data. Reuters reporting has found that drug traffickers have

exploited the exemption to bring fentanyl and its precursor

chemicals into the country unscreened.

The USPS said it was working with the CBP to institute an

efficient way to collect the new tariffs on China to "ensure the

least disruption to package delivery," it said in a statement.

The USPS did not comment on whether its temporary suspension

had been tied to Trump's order ending de minimis shipments from

China, which was announced on Saturday and came into force on

Tuesday.

"The problem is not with the Postal Service. The problem is

with Customs. They are not prepared for what's happening," said

one postal industry expert, who requested anonymity for fear of

retribution. "The trillion-dollar question," the expert said, is

who will collect the duties and who will pay them.

Kate Muth, executive director of the International Mailers

Advisory Group (IMAG), which represents the U.S. international

mailing and shipping sector, said making the change through the

traditional federal rule-making process would have allowed

affected parties to provide input and adjust in the months-long

period before implementation.

"We don't have that luxury. Everything's happening

immediately without preparation," she said.

There is also the potential that the CBP could see a net

revenue loss if the cost to collect those duties is higher than

the revenue that's collected, she said.

INDIVIDUAL CLEARANCES

Currently, de minimis parcels are consolidated so that

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, fueling the growth of fast-fashion retailers Shein and

online dollar-store Temu, both of which sell products ranging

from toys to smartphones.

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

all packages shipped to the United States each day under the

provision, according to a June 2023 U.S. congressional committee

report on China that also found nearly half of all packages

shipped under de minimis come from China.

Shein and Temu did not reply to requests for comment.

GREATER SCRUTINY

Some international couriers including FedEx ( FDX ) and SF Express,

China's largest express delivery company, said they will

continue to send packages to the United States.

But FedEx ( FDX ) said it had suspended its money-back guarantee for

U.S.-inbound shipments effective Jan. 29, citing recent

regulatory changes, according to a notice on its website.

Deutsche Post ( DPSTF )-owned DHL and UPS said they

were working with customers to limit negative impacts for them

and consumers, and to avoid disruption to supply chains.

UPS, FedEx ( FDX ) and DHL have systems in place to collect duties

and can switch customers over to those services, shipping

experts told Reuters.

Other air freight, however, could be more vulnerable to

delays.

Customs officers in telephone calls on Wednesday alerted Ram

Radhakrishnan that all shipments coming from China and Hong Kong

would be held at JFK until further notice. The CEO of Silq,

which manages quality control, logistics and customs clearance

for clients, said sweaters for his clients are being held, even

though duties on those products are paid.

"It is a little gnarly," said Radhakrishnan, whose company

does not handle de minimis and is being swept up in the chaos

following Trump's order. Representatives from CBP and JFK did

not immediately respond to requests for comment.

Radhakrishnan said he was not aware of CBP holds on inbound

China cargo at other U.S. airports.

As of Wednesday afternoon 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.