U.S. Postal Service in U-turn on suspending China parcels

In a U-turn, the U.S. Postal Service (USPS) announced in a short notice on Wednesday that it will continue accepting all international inbound mail and packages from the Chinese mainland and the Hong Kong Special Administrative Region (HKSAR).

Earlier on Tuesday, the USPS had announced a temporary suspension of inbound parcels from the Chinese mainland and the HKSAR, but clarified that letters and flats would not be affected.    

In response to the USPS's announcement that it had temporarily stopped accepting packages from the Chinese mainland and the HKSAR, Chinese Foreign Ministry on Wednesday called on the U.S. to stop politicizing and weaponizing trade and economic issues, and stop groundlessly going after Chinese companies. China will also continue to take necessary measures to firmly defend the lawful rights and interests of Chinese companies, spokesperson Lin Jian noted at a regular press conference.

The USPS's suspension had also sparked strong disapproval from the HKSAR government. A spokesperson from the HKSAR government expressed strong disapproval on Wednesday of the temporary suspension of inbound postal items containing goods from Hongkong Post by the USPS, as well as the imposition of an additional 10 percent duty on products from the region. "We urge the U.S. to take urgent actions to rectify the Federal Register notice as well as to lift the suspension of accepting inbound postal items containing goods from Hongkong Post as a matter of priority," the spokesperson said.

Confusion among retailers, shippers

The about-face added to the growing confusion among retailers and express shipping firms.

The USPS did not comment on whether its temporary suspension had been tied to U.S. President Donald Trump's order ending de minimis shipments from China, which was announced on Saturday and came into force on Tuesday. However, the USPS said in a statement it was working with the U.S. Customs and Border Protection (CBP) to institute an efficient way to collect the new tariffs on China to "ensure the least disruption to package delivery.".

"The problem is not with the postal service. The problem is with customs. They are not prepared for what's happening," said one postal industry expert, who requested anonymity for fear of retribution. "The trillion-dollar question," the expert said, is who will collect the duties and who will pay them.

The swift change puts an added burden on the CBP to use its already limited resources to focus on collecting duties for the flood of small packages that enter the country, said Kate Muth, executive director of the International Mailers Advisory Group, which represents the U.S. international mailing and shipping sector.

Making the change through the traditional federal rule-making process would have allowed affected parties to provide input and adjust in the months-long period before implementation, said Muth.

"We don't have that luxury. Everything's happening immediately without preparation," she said.

There is also the potential that the CBP could see a net revenue loss if the cost to collect those duties is higher than the revenue that's collected, she said.  

Major international shippers promised to maintain deliveries, but disruptions may still occur as the USPS works out how tariffs on small packages would be collected in tandem with the CBP.

FedEx, meanwhile, suspended its money-back guarantee on overseas shipments.

"We're all running around like headless chickens at this moment in time, trying to second-guess what's going to happen. And in two weeks' time, we may be back to normal," said Martin Palmer, co-founder of Hurricane Commerce, a cross-border e-commerce data provider.

"There has really been absolutely zero time for anyone to prepare for this," said Maureen Cori, co-founder of New York-based consultancy Supply Chain Compliance. "What we really need is direction from the government on how to handle this."

(With input from agencies)