Reverse, reverse again! In the face of the repeated taxation policy of small parcels in the United States, how do China's cross-border e-commerce think?

Global Times 02-10 08:22

Abstract:

Some practitioners believe that with the repetition of relevant policies in the United States, some Chinese traders and cross-border e-commerce platforms that simply focus on low-price strategies may need to think more deeply about operational strategies and their own competitive advantages, and it is expected that some merchants will turn to the recently promoted FBA and semi-hosting models, both of which rely on overseas warehouses and local logistics services in the United States.

Reverse, and then reverse: First, the Trump administration imposed a 10% tariff on Chinese goods on the 4th of this month and cancelled the tariff exemption for small parcels under $800;While merchants are busy dealing with the increased cost of tariffs, Trump signed an executive order on the 7th to suspend the tax on small postal parcels. This makes the mentality of China's cross-border e-commerce practitioners like "riding on a roller coaster".

"Never thought such a big country would take trade seriously."

On the first working day after the Spring Festival holiday of the Year of the Snake, many practitioners in the cross-border e-commerce industry in China and the United States have just returned to the office and caught up with a storm. On Thursday, the United States imposed a 10% tariff on Chinese goods and canceled the tariff exemption for "low-value goods" below $800.​ However, the situation "changed" within a few days, and the most concerned business "cancel the tax exemption of small packages under $800" policy was suspended. "It never occurred to me that such a big country could make such sudden changes and treat the trade of hundreds of millions or even billions of dollars a day as a joke." A cross-border e-commerce practitioner lamented to the Global Times reporter.

Gu Tao, a merchant selling small furniture to the United States on the Amazon platform, told the Global Times reporter on the 8th that in the past, some domestic businesses directly sent packages under $800 to American consumers did not need to declare customs, regardless of categories. Once the tariff exemption is removed, these goods will be taxed, and the tax rate will be increased by 10%, which means that the competitiveness of Chinese goods will be reduced.

However, Gu Tao said that many practitioners around him believe that the impact on business is relatively small, mainly because of the different cooperation models between merchants and e-commerce platforms. The store opened by Gu Tao on the Amazon platform adopts the "Amazon FBA (Fulfillment) model, where merchants send goods in bulk to warehouses operated by Amazon, and the platform is responsible for order sorting, packaging and delivery after consumers place orders. Under this operating model, the quantity of each shipment is hundreds of thousands of pieces, in accordance with the general form of trade exports, itself does not meet the duty-free conditions of small parcels under $800, and does not rely on this policy to obtain profit margins. Under the new tariff policy of the United States, he expects that the goods sold are mainly affected by the 10% tariff increase, but with the obvious cost-effective advantage of the product itself, this increase is acceptable.

In addition to Amazon, China's cross-border e-commerce platforms Temu and Shein also have similar business models. For example, under the Temu semi-managed mode, merchants need to stock goods in overseas warehouses in advance and adopt the conventional process of customs declaration, which is mainly affected by the 10% tariff increase. Corresponding to the above model is the merchant spontaneous goods, postal parcels are one of the main ways to transport goods to the other side of the ocean under this model. According to data from U.S. Customs and Border Protection cited by Yahoo Finance, the number of packages entering the U.S. annually under the policy surged from 139 million in 2015 to more than 1.36 billion in 2024, accounting for 90 percent of all U.S. freight traffic.

Some businesses told the Global Times reporter that the New Deal in the United States will indeed have an impact on the cost of goods, and they have begun to deal with it. Mr. Han, a merchant who operates camera accessories and spontaneous goods on Temu, once sent a screenshot to the reporter, showing more than 80 orders placed by users in the United States before the Spring Festival, which he had not had time to deliver. Mr. Han said that for goods with a sales price of about $10, for example, he now charges more than 80 yuan for shipping, registration fees, customs clearance fees and pre-collected duties, an increase of about 40 percent. Also feeling the change are merchants adopting a fully managed model on platforms such as Temu. In this model, many merchants themselves are factories, they focus on the development and production of products, the identity of the supplier to hand over the goods, sales, transportation, distribution are responsible for the platform, the distribution of this model is usually also using small packets of direct mail to ensure the timeliness of delivery. The platform requires merchants to control commodity prices as much as possible, but with the implementation of the new tariff policy, the profit margins of fully managed merchants may be challenged.On the first working day after the Spring Festival holiday of the Year of the Snake, many practitioners in the cross-border e-commerce industry in China and the United States have just returned to the office and caught up with a storm. On Thursday, the United States imposed a 10% tariff on Chinese goods and canceled the tariff exemption for "low-value goods" below $800.​ However, the situation "changed" within a few days, and the most concerned business "cancel the tax exemption of small packages under $800" policy was suspended. "It never occurred to me that such a big country could make such sudden changes and treat the trade of hundreds of millions or even billions of dollars a day as a joke." A cross-border e-commerce practitioner lamented to the Global Times reporter.

Gu Tao, a merchant selling small furniture to the United States on the Amazon platform, told the Global Times reporter on the 8th that in the past, some domestic businesses directly sent packages under $800 to American consumers did not need to declare customs, regardless of categories. Once the tariff exemption is removed, these goods will be taxed, and the tax rate will be increased by 10%, which means that the competitiveness of Chinese goods will be reduced.

However, Gu Tao said that many practitioners around him believe that the impact on business is relatively small, mainly because of the different cooperation models between merchants and e-commerce platforms. The store opened by Gu Tao on the Amazon platform adopts the "Amazon FBA (Fulfillment) model, where merchants send goods in bulk to warehouses operated by Amazon, and the platform is responsible for order sorting, packaging and delivery after consumers place orders. Under this operating model, the quantity of each shipment is hundreds of thousands of pieces, in accordance with the general form of trade exports, itself does not meet the duty-free conditions of small parcels under $800, and does not rely on this policy to obtain profit margins. Under the new tariff policy of the United States, he expects that the goods sold are mainly affected by the 10% tariff increase, but with the obvious cost-effective advantage of the product itself, this increase is acceptable.

In addition to Amazon, China's cross-border e-commerce platforms Temu and Shein also have similar business models. For example, under the Temu semi-managed mode, merchants need to stock goods in overseas warehouses in advance and adopt the conventional process of customs declaration, which is mainly affected by the 10% tariff increase. Corresponding to the above model is the merchant spontaneous goods, postal parcels are one of the main ways to transport goods to the other side of the ocean under this model. According to data from U.S. Customs and Border Protection cited by Yahoo Finance, the number of packages entering the U.S. annually under the policy surged from 139 million in 2015 to more than 1.36 billion in 2024, accounting for 90 percent of all U.S. freight traffic.

Some businesses told the Global Times reporter that the New Deal in the United States will indeed have an impact on the cost of goods, and they have begun to deal with it. Mr. Han, a merchant who operates camera accessories and spontaneous goods on Temu, once sent a screenshot to the reporter, showing more than 80 orders placed by users in the United States before the Spring Festival, which he had not had time to deliver. Mr. Han said that for goods with a sales price of about $10, for example, he now charges more than 80 yuan for shipping, registration fees, customs clearance fees and pre-collected duties, an increase of about 40 percent. Also feeling the change are merchants adopting a fully managed model on platforms such as Temu. In this model, many merchants themselves are factories, they focus on the development and production of products, the identity of the supplier to hand over the goods, sales, transportation, distribution are responsible for the platform, the distribution of this model is usually also using small packets of direct mail to ensure the timeliness of delivery. The platform requires merchants to control commodity prices as much as possible, but with the implementation of the new tariff policy, the profit margins of fully managed merchants may be challenged.On the first working day after the Spring Festival holiday of the Year of the Snake, many practitioners in the cross-border e-commerce industry in China and the United States have just returned to the office and caught up with a storm. On Thursday, the United States imposed a 10% tariff on Chinese goods and canceled the tariff exemption for "low-value goods" below $800.​ However, the situation "changed" within a few days, and the most concerned business "cancel the tax exemption of small packages under $800" policy was suspended. "It never occurred to me that such a big country could make such sudden changes and treat the trade of hundreds of millions or even billions of dollars a day as a joke." A cross-border e-commerce practitioner lamented to the Global Times reporter.

Gu Tao, a merchant selling small furniture to the United States on the Amazon platform, told the Global Times reporter on the 8th that in the past, some domestic businesses directly sent packages under $800 to American consumers did not need to declare customs, regardless of categories. Once the tariff exemption is removed, these goods will be taxed, and the tax rate will be increased by 10%, which means that the competitiveness of Chinese goods will be reduced.

However, Gu Tao said that many practitioners around him believe that the impact on business is relatively small, mainly because of the different cooperation models between merchants and e-commerce platforms. The store opened by Gu Tao on the Amazon platform adopts the "Amazon FBA (Fulfillment) model, where merchants send goods in bulk to warehouses operated by Amazon, and the platform is responsible for order sorting, packaging and delivery after consumers place orders. Under this operating model, the quantity of each shipment is hundreds of thousands of pieces, in accordance with the general form of trade exports, itself does not meet the duty-free conditions of small parcels under $800, and does not rely on this policy to obtain profit margins. Under the new tariff policy of the United States, he expects that the goods sold are mainly affected by the 10% tariff increase, but with the obvious cost-effective advantage of the product itself, this increase is acceptable.

In addition to Amazon, China's cross-border e-commerce platforms Temu and Shein also have similar business models. For example, under the Temu semi-managed mode, merchants need to stock goods in overseas warehouses in advance and adopt the conventional process of customs declaration, which is mainly affected by the 10% tariff increase. Corresponding to the above model is the merchant spontaneous goods, postal parcels are one of the main ways to transport goods to the other side of the ocean under this model. According to data from U.S. Customs and Border Protection cited by Yahoo Finance, the number of packages entering the U.S. annually under the policy surged from 139 million in 2015 to more than 1.36 billion in 2024, accounting for 90 percent of all U.S. freight traffic.

Some businesses told the Global Times reporter that the New Deal in the United States will indeed have an impact on the cost of goods, and they have begun to deal with it. Mr. Han, a merchant who operates camera accessories and spontaneous goods on Temu, once sent a screenshot to the reporter, showing more than 80 orders placed by users in the United States before the Spring Festival, which he had not had time to deliver. Mr. Han said that for goods with a sales price of about $10, for example, he now charges more than 80 yuan for shipping, registration fees, customs clearance fees and pre-collected duties, an increase of about 40 percent. Also feeling the change are merchants adopting a fully managed model on platforms such as Temu. In this model, many merchants themselves are factories, they focus on the development and production of products, the identity of the supplier to hand over the goods, sales, transportation, distribution are responsible for the platform, the distribution of this model is usually also using small packets of direct mail to ensure the timeliness of delivery. The platform requires merchants to control commodity prices as much as possible, but with the implementation of the new tariff policy, the profit margins of fully managed merchants may be challenged.

Profits of companies that rely on Chinese suppliers will be hit

"The wechat group of cross-border e-commerce peers is very lively in these two days, and everyone is discussing how to adjust pricing, customs clearance issues and whether to transform." Mr. Han said that some foreign counterparts also said that the Trump administration's tariff policy changes are very sudden and repeated, which makes them feel at a loss, and relevant US government agencies are also struggling to cope with the new changes. According to Reuters on the 7th, a large number of US retailers and delivery companies are confused about the new policy. "At the moment, we're all running around like headless chickens trying to guess what's going to happen next. In two weeks, we might be back to normal." Said Martin Malmo, founder of cross-border e-commerce data provider Hurricane Commerce.

​ According to US media reports, the change in policy has also led to congestion in parcel customs clearance at major airports across the United States. According to people familiar with the matter, as of February 6, New York's John F. Kennedy International Airport alone had a backlog of millions of packages.

CNN quoted experts as saying that if every package had to be inspected, the speed of international packages entering the United States would be greatly slowed. The huge amount of screening could overwhelm U.S. customs agents.

During the storm, some Chinese cross-border logistics service providers have adjusted their fees. Yuntu Logistics, Sifang and other enterprise business personnel to the "Global Times" reporter sent charging information shows that since February 5, Beijing time, goods sent to the United States will be charged 20 yuan customs clearance fees and 30% in advance of the tariff deposit, the implementation of the "more return less pay" settlement principle. However, these logistics service providers have issued a new announcement on the 8th, announcing the cancellation of these measures.

Ms. Xu, an employee of a cross-border e-commerce company in Shanghai, told reporters that the company had shipped a batch of goods to the United States before the Spring Festival, and the customs clearance process began in the United States on the 5th local time, and the declared value of the goods was between $60 and $130. However, U.S. customs duties on some goods are even higher than the declared value, which "strikes us as outrageous, and many of our colleagues feel that the United States no longer has reliable standards in international trade."

Cao Lei, deputy secretary general of the "China Cross-border E-commerce 50 Forum" and director of the Network Economic and Social E-commerce Research Center, told the Global Times on the 8th that for buyers, if the $800 package duty-free policy is canceled, not only affects cross-border e-commerce, but also small order samples of general trade will be affected. The increase in tariffs directly pushes up the cost of imported goods, and for cross-border e-commerce companies that rely on overseas suppliers such as China, the profit margin will be significantly compressed.

Accelerate the layout of overseas warehouses and diversification of the sea

Chenghai District, Shantou City, Guangdong province is China's "toy capital", Yang Ming, who runs a toy factory in the local area, told the Global Times on the 8th that many people around them have been expanding cross-border e-commerce sales channels in the past two years. Yang Ming believes that with the repetition of relevant policies in the United States, some Chinese traders and cross-border e-commerce platforms that simply focus on low-price strategies may need to think more deeply about operational strategies and their own competitive advantages, and it is expected that some merchants will turn to the recently promoted FBA and semi-managed model, both of which rely on overseas warehouses and local logistics services in the United States.

E-commerce logistics industry insiders told reporters that Temu has recently launched a new function, that is, "one-click handling of goods", which supports the release of goods under the main full hosting store to the semi-hosting store with one click. Since last year, AliExpress, Temu and other cross-border e-commerce platforms have launched a semi-managed model, which is basically operated by the merchants themselves, and the platform is only responsible for warehouse logistics, but the merchants have to stock goods overseas.

The rise of the semi-managed model corresponds to the surge in demand for overseas warehouses. The Global Times reporter learned that the number of inquiries received by many overseas warehouses in the United States has increased significantly recently, mainly from cross-border e-commerce practitioners. Recent national policies are also supporting the construction of overseas warehouses. The State Administration of Taxation recently issued an announcement on matters related to supporting the development of export tax refund (exemption) for cross-border e-commerce exports to overseas warehouses, and decided to implement a "departure tax refund" for goods exported by taxpayers to cross-border e-commerce exports to overseas warehouses.

According to the statistics of the Ministry of Commerce by the end of June 2024, Chinese enterprises have built more than 2,500 overseas warehouses, covering an area of more than 30 million square meters.Among them, there are more than 1,800 overseas warehouses focused on serving cross-border enterprises, covering an area of more than 22 million square meters. Some industry insiders said that in the increasingly complex international trade environment, the role of overseas warehouses may be further amplified. Although the construction of overseas warehouses needs to pay a certain cost, this model allows enterprises to achieve a certain degree of balance between "sea compliance" and "commodity cost reduction", especially the first transport of small parcels from air to sea, and then to land transport, logistics costs are expected to save more than 70%, and the receiving time will be shortened by nearly half.

Another development direction of cross-border e-commerce industry is the diversification of the market. According to data released by the General Administration of Customs, in 2024, China's total imports and exports to countries jointly building the Belt and Road Initiative reached 22.07 trillion yuan, an increase of 6.4% year on year, accounting for more than 50% of China's total imports and exports for the first time. Among them, imports and exports to ASEAN increased by 9%. In addition, the Middle East is also a new growth point for the cross-border e-commerce industry. Yang Ming's company began to try to expand the market in Saudi Arabia and other countries from 2023, he told reporters that the local Internet and smartphone coverage is very high, and there are many young people, like to try new things, and accept cross-border e-commerce is also very fast, "especially some oil producing countries consumers quite economic strength." According to local media reports, the East e-commerce market has attracted a large number of cross-border e-commerce platforms such as Amazon, and the local e-commerce represented by dinner has also developed rapidly.

Cao Lei said that although the US tariff on Chinese goods may bring some challenges and difficulties in the short term, it will also promote the integration and upgrading of the industry, accelerate innovation and cooperation in the long run. For cross-border e-commerce sellers, it is necessary to actively respond to challenges and seize opportunities, reduce costs and enhance competitiveness by optimizing the supply chain, improving operational efficiency, strengthening cooperation and innovation, and so on, in order to achieve sustainable development.

The author of this article: Zhao Juecheng, the source of the article: The Global Times, the original title: "In the face of repeated US policies, how to see China's cross-border e-commerce?" "

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