New trade levies target loophole used by Chinese online retailers

US President Donald Trump's new trade levies against China, Canada and Mexico include a broadside against e-commerce, with apparent plans to extinguish a long-held tariff exemption for packages worth less than US$800 (S$1,100).

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Mr Trump's executive orders directing 25 per cent levies on Canada and Mexico - plus a 10 per cent duty on China - specify that the "de minimis" exemption for small packages no longer applies.

Under the exemption, products below that dollar amount are able to enter the US without tariffs - a boon for China's e-commerce retailers, who ship often-cheaper wares directly to consumers in the US.

The full scope of the de minimis changes - whether they apply just to the new tariffs issued on Feb 1 or to older existing trade levies - was not clear. A White House spokesman did not respond to questions about its reach.

However, trade lawyers said Mr Trump's language cracking down on the de minimis exemption could apply broadly, even to existing duties against China, Canada and Mexico.

Regardless, the impact of the change threatens to fall most squarely on China, affecting retailers including Alibaba, JD.com, PDD Holdings' Temu and fashion-focused Shein.

American shoppers and companies imported about US$48 billion worth of shipments from the world under that loophole in the first nine months of 2024, according to US Customs and Border Protection estimates.