Shanghai’s Vicky Su switched from headhunting to e-commerce because she wanted a high-paying job, but President Donald Trump’s tariffs have thrown her whole business model in doubt. Since last year, the 31-year-old has been selling a mix of products on Amazon including toys, boxer briefs and Japanese futon covers.
She has kept overheads low by having her parents help and shipping products duty-free to the U.S. under the de minimis exemption. But that policy was canceled, reinstated and cancelled again over the last three months.
“I feel like I’ve been on a rollercoaster because there have been a series of ups and downs,” Su said. Throughout President Donald Trump’s first term and the start of his second, e-commerce sellers like Su were insulated from his tariffs on Chinese exports because of the de minimis exemption.
This policy allowed items valued at $800 or less to be imported tax-free. Over 90% of cargo entered the U.S. this way, according to the U.S. Customs and Border Protection. It helped drive the growth of bargain e-commerce platforms such as Shein and Temu. Trump ended the duty-free loophole for Chinese goods on May 2.
The first time he canceled the de minimis exemption was in early February, and he hiked tariffs on all Chinese exports to 10%. Suddenly millions of packages flowing into the U.S. that previously went unchecked, now required customs inspection. Perhaps overwhelmed with the workload, the U.S. Postal Service suspended parcels from China and Hong Kong the following day.
“I hope these U.S. decisions are called off,” Su said in a WeChat message to Marketplace in February. “Otherwise, many Chinese companies will go bankrupt.”
Another e-commerce seller, lingerie manufacturer Lei Congrui, sounded less worried when Marketplace checked in to see how worried he was about the de minimis cancellation. His factory in eastern Jiangsu province manufactures sheer dresses and other costumes that Lei refers to as erotic clothing. He sold direct to customers through de minimis, and as a wholesaler. “We have our own warehouse in the U.S., so I can continue selling in the American market, no problem,” Lei said.
Marketplace has been following Lei’s business since 2018, just before President Trump imposed tariffs in his first term. Not only did his business survive the extra levies, but Lei said the percentage of his sales to the U.S. went up from 50% in 2018 to 70% at the start of this year. “In the end, it’s the American consumer that will pay the extra costs,” Lei said. |
