The U.S. is about to see some major shifts in trade rules starting early 2025. President-elect Donald Trump has already shared plans to change how the U.S. handles imports, tariffs, and even e-commerce giants like Shein and Temu. These changes will affect businesses, freight, and supply chains in a big way. Here’s what to know.
No More Duty-Free Imports from China
For years, a rule called Section 321 has allowed companies to ship goods from China to the U.S. without paying taxes if the shipment was worth less than $800. That rule is ending for Chinese imports.
This change is a big blow to businesses like Shein and Temu, which rely on duty-free shipping to keep prices low. It also shuts down a common workaround where companies sent goods to Mexico or Canada first, then broke them into smaller packages to ship into the U.S. and avoid paying tariffs. This loophole will no longer work.
New $2 Fee on Imported Packages
In addition to ending duty-free imports, a new $2-per-package fee is being considered for goods entering the U.S. Businesses would have to pay this extra charge on top of regular tariffs.
For companies shipping thousands of small packages daily, this fee could add up fast, significantly raising costs. E-commerce brands will need to rethink their pricing and operations to handle these additional expenses.
Section 321 Strategy is Disappearing
Without Section 321, businesses lose a way to save up to 20% on costs by shipping through Mexico or Canada. Instead, they’ll have to ship goods directly to the U.S., which is more expensive.
The changes could take effect as soon as February or March 2025. This doesn’t leave much time for companies to adjust their strategies, and many may face higher costs until they find alternatives.
What Can Companies Do Now?
Businesses have a few options to adapt to these new rules. Here are two main strategies:
1. Use Warehouses in the U.S.
Instead of routing goods through other countries, companies can ship directly to U.S.-based warehouses. While this means paying tariffs upfront, it could save time and simplify operations. Plus, storing inventory closer to customers can lead to faster delivery times.
2. Move Manufacturing to Other Countries
Another option is moving production out of China to countries like Vietnam, Malaysia, or India. Many Chinese manufacturers already have factories in these areas, so companies could still work with the same suppliers while avoiding heavy tariffs.
This option isn’t easy, though. Shifting production takes time, and the shipping routes from these countries might not be as efficient or affordable as the well-established China-to-U.S. routes.
Tariffs Are Coming Back
Trump’s administration plans to bring back high tariffs on imported goods. Peter Navarro, known for his tough trade policies during Trump’s first term, is back as a senior adviser on trade and manufacturing.
Experts predict new tariffs of around 10%, which will likely go into effect by late February or March 2025. Businesses are already trying to stock up on goods before these tariffs hit to avoid higher costs.
Security Concerns Could Lead to Bans
On top of trade changes, national security concerns are adding more challenges. The U.S. has been debating banning TikTok due to concerns about its Chinese ownership. If the courts approve this ban, other Chinese companies like Temu and Shein could face similar restrictions.
Kash Patel, Trump’s pick for FBI director, has already voiced concerns about Temu, calling it a bigger risk than TikTok. If these platforms are banned, it could disrupt e-commerce and limit access to their affordable products.
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