On February 5, the stocks of Chinese online shopping companies Alibaba and PDD Holdings fell in early trading. This happened after the United States Postal Service (USPS) said it would stop accepting parcels from mainland China and Hong Kong for an unknown length of time.
Alibaba’s stock went down by 2.4%, while PDD’s stock dropped by 6%, according to a report.
The USPS hasn’t given a reason for this decision, but it follows a move by former President Donald Trump to end a special rule. This rule, called the “de minimis” exemption, allowed packages worth less than $800 to come into the US without extra taxes. Many brands like Temu and Shein, which sell inexpensive clothing, relied on this exemption to ship items to customers in the US.
At the same time, the Trump administration added a new tax of 10% on many products coming from China. In retaliation, China plans to impose taxes on some American goods starting on February 10, including a 15% tax on certain coal and natural gas products.
Trump had also suggested putting a 25% tax on imports from Mexico and Canada but paused that decision for 30 days for further talks. He has also mentioned potential taxes on products from the European Union, arguing that the US is not getting a fair deal.
FAQs
1. What is ‘de minimis’?
The “de minimis” exemption allowed cheap packages to enter the US without paying any taxes, as long as they were worth less than $800.
2. Are there other exemptions?
This rule also meant that some packages could come in without being checked
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