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AsianFin --  Chinese cross-border sellers had a bumpy start in 2025, as logistics companies were sent into a frantic rush to navigate abrupt regulatory shifts under the Trump administration.

"We have been overwhelmed in the past few days. The cancellation came without any buffer period," Chen Xi, the founder of GOFAST Supply Chain, told AsianFin. GOFAST is a cross-border logistics company specializing in U.S. customs clearance and delivery services.

U.S. President Donald Trump had imposed 10% tariffs on Chinese goods and revoked the $800 de minimis tax exemption on Tuesday, although he reinstated the exemption on Friday. This change led to an influx of inquiries from platform sellers and upstream clients seeking immediate solutions.

The End of Type 86 (T86) Clearance and Rising Costs for Cross-Border Sellers

The once removal of the $800 tax exemption means that the previously tax-free T86 clearance model can be gone at any time. E-commerce platforms like Shein and Temu, which relied heavily on T86 for direct shipping to the U.S., now find it hard to navigate. Attempts to file T86 entries post-executive order were responded with "ENTRY CANCELLED" notifications.

Without T86, direct shipping parcels must go through conventional customs clearance channels such as T01 or T11. Unlike T86, which only incurred system and labor costs, T11 requires additional fees, including import taxes and processing fees. U.S. Customs' Merchandise Processing Fee (MPF) charges $2.62 per air freight entry, $7.85 per ocean freight entry, and $11.78 per international mail entry.

The additional 10% tariff is applied under the new customs code 9903.01.20. This means that if a product was previously exempt from tariffs, it is now subject to a 10% tax. If it was already taxed at 25%, the new rate would rise to 35%.

"For a $100 product, the tariff alone is now $40," said Chen. "With taxes and declaration fees combined, nearly half of the product value is wiped out."

Chen also noted that shipments in transit, which were previously tax-free, now face millions in additional tax liabilities. Platforms are actively discussing strategies to absorb these costs.

Unlike cross-border logistics providers, UniUni, a North American last-mile delivery company, views this policy shift as an inevitable change.

Peter, the founder and CEO of UniUni, told AsianFin, "Our clients, valued in the billions, have strong strategic and public relations capabilities. They have prepared for this change by adjusting customs clearance strategies in Canada and transitioning from fully managed to semi-managed shipping models in the U.S. Many are shifting from direct air shipping to local fulfillment. Even on Amazon, most products originate from China, and it will take years to move supply chains back to the U.S."

To mitigate risks, UniUni is also working to diversify its client base and localize operations.

For Chinese cross-border sellers that rely on low-cost strategies and small-value packages direct shipping, this policy shift dramatically could increase operating costs. However, higher-ticket merchants are less affected, as they can leverage general trade clearance with containerized shipping to manage tariff impacts.

Anticipating possible changes in de minimis regulations, some cross-border platforms adjusted their strategies in advance. Shein established distribution and supply chain centers in the U.S. and offered free access to its overseas warehouses to help sellers stock inventory preemptively. Temu adopted a semi-managed model, pre-stocking goods in U.S. warehouses and encouraging local sellers to join its platform.

The Shift Toward Overseas Warehousing

Among those most affected are small-value packages direct shipping sellers. Chen noted that logistics costs will increase by an estimated 40%-50%, significantly impacting sellers who rely on low-cost direct shipping. As air freight volumes decline, more sellers are expected to transition to overseas warehousing.

Industry data show that warehouse fulfillment is becoming the dominant model for U.S. cross-border sellers. In 2023, 78.57% of mid-sized sellers (with annual sales between $100 million and $300 million) used third-party warehouses. By 2024, the rise of semi-managed services from Chinese platforms and congestion in Fulfillment by Amazon (FBA) warehouses have driven an estimated two million square feet of additional warehouse space in the U.S.

With direct shipping losing its cost advantage, U.S. overseas warehouses may experience a resurgence.

"Since the launch of semi-managed services, the demand for drop shipping from overseas warehouses has been increasing. Fulfillment via overseas warehouses is becoming a clear trend for cross-border merchants. Last year, we focused on European warehouses; this year, we plan to expand U.S. warehouse services," a logistics industry insider told AsianFin.

Industry analysts predict that the overseas warehousing model will see another wave of expansion, driving demand for services such as small-value packages fulfillment, warehouse transfers, returns processing, and inventory management.

However, Chen pointed out a potential downside, saying "When factoring in new tariffs, direct shipping could become more expensive than overseas warehousing. But overseas warehouses have a slower turnover rate, and sellers bear the risk of unsold inventory. If cross-border goods don't sell, they either get liquidated at a loss or discarded. It is difficult to predict the sales volume."

Government Policies and the Future of Cross-Border E-commerce

In response to these challenges, some sellers are considering raising prices. Meanwhile, the Chinese government is rolling out supportive policies for overseas warehousing. China's General Administration of Customs on Thursday announced export tax rebate policies to encourage cross-border e-commerce warehouse expansion. Under the policy, sellers can apply for tax refunds once their goods clear customs for overseas warehousing.

According to a report by Roland Berger, China is facing harsher trade restrictions amid global geopolitical tensions. As a result, China’s export model is evolving in three key dimensions: destination markets, product categories, and trade models. The country is shifting toward markets in the Global South and Europe while exploring new globalization strategies, including establishing overseas production and logistics hubs.

With global tax exemption policies tightening, cross-border merchants, platforms, and logistics operators are bracing for higher costs. Despite increased tariffs, China remains committed to expanding its presence in the U.S. market.

According to Adobe Analytics, U.S. e-commerce sales during the Cyber 5 shopping period (Black Friday to Cyber Monday) reached a record $41.1 billion in 2024, up 8.2% year-over-year. This surpasses the 7.8% growth recorded in 2023, signaling continued expansion in the online retail sector.

Moreover, the global reliance on Chinese manufacturing remains strong. The United Nations Industrial Development Organization forecasts that by 2030, China’s share of global manufacturing output could rise to 45%, while the U.S., Japan, and Germany will collectively fall below 20%.

In the context of global supply chain restructuring, China remains deeply integrated into U.S. and international trade networks. As Chinese cross-border businesses navigate new tariffs, major U.S. retailers like Amazon and Walmart, which rely heavily on Chinese suppliers, will also feel the squeeze. Ultimately, the additional costs may be passed down to consumers.

As Trump continues wielding the big "tariff stick," Chinese cross-border e-commerce is bracing for a turbulent year. Overseas warehousing may emerge as one of the few winners in this shifting landscape.