Hongkong Post extends suspension of US parcel deliveries over tariff uncertainty

(Originally posted on : Invezz )

Hong Kong’s postal service has extended its suspension on shipping items containing goods to the United States, even after the US postal administration reversed its temporary ban on parcels from China.

The ongoing restriction highlights escalating trade tensions between the two economies, with Hongkong Post citing the need for further clarification on new tariff rules before resuming deliveries.

The dispute follows Washington’s decision to impose an additional 10% tariff on Chinese imports, eliminating a previous exemption that allowed small-value shipments to enter duty-free.

The US initially halted all parcel shipments from China, including those from Hong Kong, before abruptly reversing course.

Despite this change, Hongkong Post has maintained its suspension, citing unresolved issues related to duty collection and regulatory compliance.

E-commerce faces cost pressures

The sudden policy changes have introduced new challenges for cross-border e-commerce platforms reliant on cost-effective shipping from China.

Companies like Shein and Temu, which have thrived by leveraging direct-to-consumer shipping routes under the former duty-free threshold of $800, now face an unpredictable regulatory environment.

With nearly $427 billion worth of Chinese goods entering the US in 2023, changes in tariff policies could significantly impact consumer prices, particularly in categories such as electronics, apparel, and household items.

Cheap and fast shipping has been a major driver for platforms catering to budget-conscious American consumers, making any additional costs from tariffs a potential threat to their business models.

Retail analysts note that higher shipping costs and import duties could force e-commerce platforms to reconsider their fulfilment strategies.

Some companies may seek alternative distribution channels, such as warehousing goods in intermediary markets, to bypass direct shipments from China.

Others may adjust pricing or offer bulk shipping options to offset increased costs.

Hong Kong caught in the middle

The suspension of parcel shipments from Hongkong Post underscores the broader economic strain caused by geopolitical tensions between the US and China.

While Hong Kong maintains a separate trade status under its Basic Law, Washington no longer grants the city preferential treatment in trade matters.

The removal of its special customs status has exposed Hong Kong exports to the same tariffs imposed on mainland Chinese goods, further complicating the city’s role in global trade.

The Hong Kong government has strongly criticised the US tariffs, urging Washington to “rectify its wrongdoing” and reconsider its trade policies.

The city’s authorities argue that the new duties unfairly penalise Hong Kong businesses, disrupting supply chains and creating unnecessary trade barriers.

Logistics industry in limbo

Logistics firms and postal services operating in the region face increasing uncertainty as they attempt to navigate shifting US import policies.

While the US Postal Administration has stated that it will coordinate with Customs and Border Protection to ensure proper tariff collection, businesses remain concerned about potential delays and regulatory confusion.

For now, Hongkong Post has yet to announce when it will lift the suspension, leaving customers and businesses in limbo.

The ongoing uncertainty is particularly problematic for companies relying on the city as a key logistics hub for shipments to North America.

Industry experts caution that further trade restrictions or inconsistent policy enforcement could lead to disruptions across multiple sectors.

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