The United States has decided to reduce taxes on small packages coming from China and Hong Kong. Earlier, these parcels faced a 120% tax, but now, the tax has been lowered to 54%. This change happened after a 90-day break in the trade fight between the US and China. President Donald Trump signed an order to make this tax cut official. The high tax was first introduced to fix a rule called the "de minimis" loophole, which allowed cheap goods to enter the US without paying any fees.

From Wednesday, the tax will be 54% instead of 120%. The fixed fee of 100willremainthesame,anditwillnotincreaseto100willremainthesame,anditwillnotincreaseto200 in June as planned earlier. This decision came after the US and China agreed to improve their trade relations. Both countries decided to lower taxes on each other’s goods. The US reduced its tariffs by 115%, bringing them down to 30%, while China cut its taxes to 10%.

At a press conference, Trump said, "They've agreed to open up China." This means China is now more willing to trade with the US under better terms.

However, the de minimis rule has faced a lot of criticism. This rule also allows travelers coming back to the US to bring goods worth up to $5 without declaring them at customs. Many lawmakers, from both political parties, are unhappy with this rule. Over the years, the number of packages entering the US under this rule has increased massively. More than 90% of all small packages come in through de minimis, and about 60% of these come from China. Most of these packages are from online stores like Temu and SHEIN, which sell directly to customers.

The tax cut is good news for SHEIN and Temu because they can now send their products to the US at a lower cost. This means their items will stay cheap, and American shoppers will continue buying from them. But some people worry that this will hurt small businesses in the US. Since Chinese products are already cheaper, lowering taxes makes it even harder for American companies to compete.

President Trump’s decision shows that the US and China are trying to fix their trade problems. By reducing taxes, both countries hope to make trade smoother. However, the debate over the de minimis rule continues. Some people believe it helps consumers by keeping prices low, while others argue it harms local businesses and workers.

For now, SHEIN and Temu will benefit from this change. Their fast fashion and low-cost products will keep flowing into the US market. But as trade policies keep changing, the future of small businesses and international trade remains uncertain.

Impact on American Consumers

The tariff cut means American shoppers will likely see little to no price increase on cheap goods from China. Websites like SHEIN and Temu can keep selling low-cost clothes, electronics, and home items without passing extra fees to customers. Many buyers, especially young people and budget shoppers, rely on these platforms for affordable products. However, some experts warn that while prices stay low now, the US might become too dependent on Chinese imports. If trade tensions rise again in the future, sudden tax hikes could disrupt supply chains and lead to shortages or higher costs.

What’s Next for US-China Trade?

The reduction in tariffs is a temporary step, not a permanent solution. Both countries are still negotiating long-term trade deals. The US wants China to stop unfair trade practices, like forcing companies to share technology. Meanwhile, China hopes the US will drop more taxes on its exports. If talks go well, trade between the two nations could become smoother. But if disagreements return, taxes might go up again, affecting businesses and shoppers on both sides. For now, companies like SHEIN and Temu will enjoy lower costs, but the real test will be whether the US and China can find a lasting agreement.