According to a report in The Loadstar, Chinese exporters are using a seemingly legal customs loophole in the US postal system to workaround new regulations and avoid duty.

In May, the Trump administration removed the ‘de minimis’ exemption for import shipments from Hong Kong and China, which allowed shipments valued at less than $800 to be imported to the US free of duty.

Up until that decision, the rule was enabling around 3.5 million low value shipments to enter the US per day, most of which were from China. Instead, a new duty rate of either 30% or $25 per item was brought in for Hong Kong and China imports.

However, US postal shipments require a CN22 customs declaration form to be completed, which requests the country-of-origin information as an ‘optional’ field to complete.

According to the Loadstar’s report, numerous Chinese exporters are legally choosing to not provide the country of origin on the form and receiving the benefit of the ‘de minimis’ exemption to pay no duty or taxes. 

Another apparent practice is to not ship directly from China to the US, and to move the products as a transhipment through nations like Singapore. The article even goes on to suggest that the UK is one of the countries being used on this basis. 

We assume that the loophole will be closed at some point, with potentially hundreds of millions of dollars worth of duty being avoided. The Westbound team will be keeping a close eye on how this story develops.

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