Hong Kong exporters face crisis as US slaps steep tariffs on small parcels

[WORLD] Hong Kong exporters are dealing with new US trade rules that have a substantial impact on tiny parcel shipments. Former President Donald Trump's recent executive order triples duties on low-value goods from Hong Kong, raising concerns about potential evasion strategies and compliance issues. The policy change, which takes effect on May 2, 2025, replaces the existing 30% or $25 duty with a 90% tariff or a flat $75 per item for a wide range of consumer items.​

The tariff hike specifically targets goods valued under $800, a threshold previously exempt from higher duties under the U.S. de minimis rule. This exemption has long been a lifeline for small businesses and e-commerce sellers, but the new policy effectively closes this loophole for Hong Kong-origin shipments. Industry analysts warn that the move could disproportionately affect small and medium-sized enterprises (SMEs), which lack the resources to absorb the additional costs or reroute supply chains.

This article is intended for business owners, logistics professionals, policymakers, and stakeholders in the e-commerce and trade sectors who are directly affected by international shipping regulations and tariff policies.

U.S. Tariff Changes and Their Impact

The U.S. Postal Service's temporary halt on accepting packages from China and Hong Kong earlier this year disrupted global supply chains. Although the suspension was later reversed, it highlighted the challenges faced by exporters in navigating the evolving tariff landscape.

The latest tariff increase is part of a broader U.S. strategy to address concerns over trade imbalances and alleged circumvention of sanctions. Hong Kong’s unique position as a global trade hub has made it a focal point in these tensions, with U.S. officials citing the need to prevent the diversion of goods subject to existing China-specific tariffs. However, critics argue that the measures risk stifling legitimate trade and harming U.S. consumers who rely on affordable imports.

In response to these developments, the Hong Kong government has expressed strong disapproval of the U.S. measures, emphasizing that they undermine the city's status as a separate customs territory recognized by the World Trade Organization (WTO).

Compliance and Enforcement Challenges

The increased tariffs raise concerns about potential evasion tactics, such as undervaluing shipments or misclassifying goods to avoid higher duties. Customs authorities are expected to enhance scrutiny of low-value packages, which could lead to delays and increased costs for exporters.

Logistics providers are already reporting a surge in inquiries from exporters exploring alternative shipping routes, such as transshipment through Southeast Asian countries. However, these workarounds come with their own complexities, including higher transportation costs and longer delivery times. Experts caution that while rerouting may offer short-term relief, it is not a sustainable solution for Hong Kong’s export-dependent economy.

Hong Kong's Response and Future Outlook

In light of the new tariffs, Hong Kong plans to file a complaint with the WTO, asserting that the U.S. measures violate international trade agreements and disregard Hong Kong's separate customs status. The outcome of this dispute could have significant implications for future trade relations between Hong Kong and the U.S.

Meanwhile, local trade associations are urging the Hong Kong government to provide financial support, such as subsidies or tax incentives, to help exporters weather the transition. Some lawmakers have also called for accelerated diversification of export markets, particularly in regions like the Middle East and Southeast Asia, where demand for Hong Kong’s goods remains strong.

The recent changes in U.S. tariff policy present significant challenges for Hong Kong exporters, particularly those relying on small parcel shipments. As businesses adapt to these new regulations, ongoing dialogue and potential dispute resolution through international trade bodies will be crucial in shaping the future of cross-border trade between Hong Kong and the United States.