A Guide for Cross-border Sellers to Adapt to Small Package Tariffs

Recently, the United States announced major adjustments to tariffs on small packages from mainland China and Hong Kong. Starting May 2, 2025, the de minimis duty-free policy for imports valued at less than $800 in mainland China and Hong Kong will end. In addition, starting June 1, the tariff on each small package will increase from $50 to $150.

The increase in tariff costs, the uncertainty of logistics timeliness, and the increase in compliance risks have become urgent issues for sellers. As a professional international logistics service provider, Chinadivision is well aware of the pain points of sellers. The following will start from multiple aspects to analyze the response strategies in detail to help sellers move forward steadily in the wave of small package tariff adjustments.

Impact of tariff adjustment on cross-border e-commerce sellers

Increased costs

Tariffs have increased from the original duty-free status to a tax rate of up to 90%-150%, which directly increases the operating costs of sellers. The profit margins of low-priced goods have been compressed, especially for small and medium-sized sellers who rely on the direct mail model.

Increased customs clearance complexity

After the cancellation of the T86 customs clearance mode, the switch to the T11 or T01 mode will make the customs clearance process more complicated and take longer. Customs inspections are more stringent, and inaccurate declarations may result in cargo detention or fines.

Decreased logistics timeliness

The surge in tariff declarations will lead to customs congestion, and logistics companies such as DHL and USPS may charge additional processing fees, and the cross-border delivery timeliness will be extended from 7-15 days to more than 1 month.

Decreased market competitiveness

Due to the increase in tariffs, commodity prices have risen, which may cause consumers to turn to low-priced products in other countries, affecting sales and market share.

Solutions for B2B companies and e-commerce sellers

Layout of overseas warehouses

Pre-stocking through overseas warehouses can reduce the number of customs clearances for a single package and reduce tariff costs. Overseas warehouses can greatly shorten logistics time, improve delivery efficiency, and enhance consumer shopping experience. At the same time, it can avoid tariff pressure from cross-border direct mail. However, the construction and operation of overseas warehouses require a lot of money and resources, including warehouse leasing, equipment purchase, personnel training, etc.

You can find a third-party overseas warehouse service provider to cooperate, such as Chinadivision, to provide one-stop overseas warehouse services, including warehousing, sorting, packaging and distribution.

Plan shipments in advance

Reduce tariff risks, complete shipments before the policy takes effect, and avoid additional costs caused by tariff adjustments. ChinaDivision provides fast customs clearance and efficient logistics services to help customers complete order fulfillment before the policy takes effect.

Adjust pricing strategy

By increasing product prices, the increased tariff costs are indirectly transferred to consumers to ease cost pressure. However, commodity price increases require careful assessment of market acceptance to avoid a decline in sales due to price increases. It is necessary to fully understand market demand and competitor pricing strategies, formulate reasonable price increases, and ensure that while maintaining a certain sales volume, cost pressure is alleviated.

Optimize supply chain management

By optimizing the supply chain layout, tariff costs can be reduced and the flexibility and risk resistance of the supply chain can be improved. However, the difficulty of supply chain management has increased, and it is necessary to accurately predict market demand and arrange inventory quantities reasonably. We can strengthen cooperation with suppliers, optimize supply chain management processes, and improve the flexibility and risk resistance of the supply chain.

Diversified market layout

Reduce dependence on a single market, diversify risks, and explore emerging markets. However, emerging markets may face different regulations, cultures, and consumer demands. Actively explore markets along the "Belt and Road" and emerging economies, and reconstruct a stable supply chain by optimizing supply chain layout and strengthening local procurement.

Enhance brand value

Branded cross-border companies have a higher brand premium, and can maintain a certain profit by adjusting product prices while absorbing certain tariff costs themselves. However, brand building requires time and resource investment. We can increase investment in product research and development, develop products with unique functions and designs, and use differentiated product competition to attract consumers.

Professional services of Chinadivision

As a professional international logistics service provider, Chinadivision provides comprehensive logistics solutions to help cross-border e-commerce sellers cope with the challenges brought about by tariff adjustments:

Optimize packaging and integration

If multiple orders are sent to the same destination, we will merge the shipments into one package where appropriate. Our warehouse technology automatically groups SKUs and optimizes shipping costs while staying within customs limits as much as possible.

Diversify your delivery locations

We help businesses store goods closer to end customers—whether through U.S. warehouses or bonded warehouses in neighboring countries. This can completely avoid cross-border fees for duplicate orders and help: faster delivery, better customer satisfaction, and reduced customs complexity.

Global Logistics Network

Work with leading global logistics providers to ensure your goods can be delivered quickly and safely to customers around the world.

Customized Services

Customized logistics solutions are provided according to your needs, including packaging optimization and transportation arrangements. Develop strategies to minimize tariff impacts and optimize supply chains.

Professional Support

Our team provides professional logistics support and expertise in handling complex customs regulations to ensure that your business runs smoothly.

Avoid the following dangerous practices

Underreporting the value of the package,

Using unknown courier services, unclear customs regulations,

Delaying shipments until policies are clear,

These shortcuts may result in penalties, goods destruction, or platform bans.

What can you do now?

Review your product SKUs and pricing thresholds for selling to the US, plan your shipments in advance for April and May, and avoid the peak of tariffs.

Common tariff hot topics and pain points

Will my shipping costs increase significantly?

Yes, it is possible. If the exemption is lifted, all packages - even those below $800 - may be subject to import duties and taxes, increasing the landed cost of each order.

Will customs clearance be slower?

Possibly. As more packages are subject to tax, customs processes may face bottlenecks, causing delays in last-mile delivery.

How to reduce the impact of tariffs on profits?

Increase product added value, optimize supply chain, and switch to overseas warehouse model to reduce the number of customs clearances for a single package.

How to open up new markets to diversify risks?

Quickly enter Southeast Asia, the Middle East, and Europe through ChinaDivision's global logistics network, and reduce dependence on the US market.

ChinaDivision actively follows US customs policy updates and tests logistics solutions to help our customers stay compliant and competitive. If you need more help, please contact ChinaDivision. We will provide you with professional logistics services to ensure your business runs smoothly.