In a significant move to ease trade tensions, the United States announced a substantial reduction in tariffs on low-value shipments from China. Effective May 14, 2025, the "de minimis" tariff rate will decrease from 120% to 54%, while maintaining a minimum flat fee of $100 per shipment.

This policy shift follows a broader 90-day tariff truce between the U.S. and China, aiming to de-escalate ongoing trade disputes. The agreement includes reciprocal tariff reductions, with the U.S. lowering tariffs on Chinese goods to 30% from 145%, and China reducing tariffs on U.S. products to 10% from 125%.

The reduction in "de minimis" tariffs is particularly significant for e-commerce platforms like Temu and Shein, which have relied on the previous duty-free threshold to ship low-cost goods directly to American consumers. However, the continuation of the $100 flat fee per shipment may still impact their pricing strategies and profit margins.

Financial markets responded positively to the announcement, with shares of PDD Holdings, Temu’s parent company, rising by 7% following the news . The tariff reductions are expected to boost trade volumes and alleviate some of the economic uncertainties that have weighed on global markets.

Despite the temporary nature of the truce, the move signals a willingness from both nations to engage in constructive dialogue and seek long-term solutions to their trade disagreements. Further negotiations are anticipated to build on this momentum and address remaining issues in the bilateral trade relationship.

The impact of these changes will be closely monitored by businesses and policymakers alike, as they navigate the evolving landscape of international trade and its implications for the global economy.