The recent wave of U.S. tariff announcements has sparked significant discussions and uncertainty among e-commerce merchants. To provide clarity, here is a breakdown of what these tariffs mean and how businesses can navigate the changes.
All products originating from China and Hong Kong are now subject to an additional 10% ad valorem duty—on top of any existing duties, taxes, fees, or other charges. “Ad valorem” means the extra duty is calculated based on the product's transactional value.
This change applies regardless of where the product is shipped from. If an item is manufactured in China, it will face these additional tariffs, whether it ships from China or another country.
Beyond the increased duties, another critical change is that products valued under $800 USD from China and Hong Kong no longer qualify for “de minimis” clearance. Previously, such products could enter the U.S. duty- and tax-free under this exemption. Now, they are subject to the same tariff increases.
For example, a $500 dress manufactured in China sold to a U.S. based buyer would have previously been duty-exempt under de minimis rules. Under the new tariff structure, it is now subject to regular duty charges, the additional U.S. China tariff (in place since January 2018), and an extra 10% duty on top:
|
Regular Duty |
8.3% |
$ 41.50 |
|
US China Tariff |
7.5% |
$ 37.50 |
|
New Additional Duty |
10.0% |
$ 50.00 |
|
Total Duties |
25.8% |
$ 129.00 |
IMPORTANT UPDATE (8th Feb 2025):
“US President Donald Trump has temporarily paused measures to close a tariff exemption on low-cost shipments from China while officials figure out how to tax the millions of packages that arrive in the US every day.”
President Donald Trump has temporarily halted tariffs on small-value packages arriving from China, reportedly to allow federal agencies time to establish a system for processing the millions of shipments that cross the U.S. border daily without paying taxes.
The executive order, issued Wednesday, does not specify an end date but states that the pause will continue until the Department of Commerce implements “adequate systems” to efficiently process and collect tariff revenue.
A significant shift in this tariff wave is that Hong Kong is now included. Previously, products originating from Hong Kong were exempt from China tariffs, but they are now treated the same as Chinese-manufactured goods. This means businesses that relied on Hong Kong as a manufacturing hub will also see cost increases.
There have been discussions about implementing a 25% duty increase on imports from Canada and Mexico. However, this tariff increase has been paused for 30 days.
While it’s uncertain whether these tariffs will take effect, businesses that heavily depend on the U.S. market should start considering alternative strategies. Expanding into Asian or European markets could help mitigate potential risks if these tariffs move forward.
With these tariff changes in place, e-commerce businesses should:
✔ Review product sourcing and manufacturing locations to understand which items in their catalog are affected.
✔ Recalculate pricing strategies to account for increased costs.
✔ Explore alternative supply chain options outside of China and Hong Kong.
✔ Diversify into new markets to reduce dependence on the U.S. and avoid potential disruptions.
As the situation continues to evolve, staying informed and proactive is essential for e-commerce merchants. At Glopal, we’re committed to helping businesses navigate these changes with reliable duty and tax estimation solutions for seamless cross-border transactions.
Have further questions or need assistance? Contact us today to learn how we can help you seamlessly manage these changes and optimize your cross-border operations.
Federal Register
U.S. Customs and Border Protection