USPS Resumes Accepting Packages from China Amid New Tariffs

The U.S. Postal Service (USPS) has announced that it is once again accepting packages shipped from China following a brief interruption. This decision comes in the backdrop of ongoing trade tensions and the recent enforcement of new tariffs that could significantly affect logistics companies like United Parcel Service, Inc. (UPS) and FedEx Corp. (FDX).

Background Information: The USPS temporarily halted the acceptance of parcels from China due to the implementation of an additional 10% tariff on Chinese imports by President Donald Trump. In conjunction with this, the administration also closed a loophole that allowed certain packages priced under $800 to enter the United States without incurring tariffs, as reported by major news outlets.

This loophole, often utilized by businesses such as Shein and Temu, saw a significant increase in usage over the recent years. During the 2024 fiscal year, around 1.36 billion shipments arrived in the U.S. through this exemption, indicating a considerable volume of goods being shipped directly to American consumers.

On Wednesday, the USPS confirmed its cooperation with Customs and Border Protection to establish an effective mechanism for the collection of the new tariffs on China shipments. The goal is to reduce potential disruptions in package delivery caused by these changes.

Now that the USPS has returned to accepting Chinese packages, market observers expect a possible stabilization in the distribution of shipments, which could mean less business migrating to competitors like UPS and FedEx. Despite this development, the persisting trade tensions and new tariff regulations may still influence how investors feel about the logistics sector.

Current Stock Performance

As of the latest update, shares of FedEx are trading approximately 0.71% lower at $249.21, while UPS stock is seeing a slight decline of about 0.05% at $111.71. These fluctuations can be attributed to the ongoing developments in trade policies and how they affect the logistics industry.

Image: Courtesy of USPS

USPS, Tariffs, Logistics