China files WTO complaint against Trump’s new 10% tariff on imports 

The World Trade Organization (WTO) has received a formal protest from China, which claims that President Donald Trump’s new 10% tax on Chinese imports is discriminatory and against WTO regulations.

The case, which was filed on Wednesday, also contests Trump’s decision to remove a duty-free exception for low-value goods, which has left shippers and merchants perplexed.

As companies struggle with the sudden removal of the “de minimis” exception, which let package imports under $800 to enter the United States duty-free, Beijing has asked for trade discussions with the United States. To ease cross-border shipping, e-commerce behemoths like Shein, Temu, and Amazon have mostly depended on this clause to facilitate cross-border shipments.

All small items from Hong Kong and China now need to have customs entries on file prior to arrival, according to a U.S. Customs and Border Protection (CBP) officer.

Supply networks may be further disrupted if goods is returned to the sender due to improper paperwork.

China’s consultation request, which asserts that the increased levies are based on “unfounded and false allegations” about China’s involvement in the fentanyl opioid crisis, was confirmed by the WTO. Beijing contends that the tariffs violate the United States’ commitments under WTO accords, are discriminatory, and only target goods of Chinese origin.

Consequences of the WTO Conflict Resolution Procedure

Similar to a 2020 WTO verdict that determined Trump’s first-term China tariffs breached trade laws, China’s complaint starts a dispute resolution procedure that might ultimately lead to a finding against Trump’s tariffs.

However, because the United States has been preventing judge nominations, the WTO’s Appellate Body has been dysfunctional for years, making enforcement difficult. Because of this incompatibility, China could not experience any real relief even if it prevails in court.

On Wednesday, the U.S. Postal Service (USPS) resumed accepting packages from China and Hong Kong after previously suspending them. Millions of shipments per day had been in danger of being disrupted by the temporary prohibition.

Concerns about the abrupt changes in trade policy have been raised by industry stakeholders. The situation was chaotic, according to Martin Palmer, co-founder of Hurricane Commerce, a data supplier for cross-border e-commerce:

“Like headless chickens, we’re all frantically attempting to predict what will happen. We could return to normal in two weeks.

Closing the de minimis exception is justified by the Trump administration as a necessary measure to stop fentanyl trafficking into the United States. Drug traffickers have also taken advantage of the gap to import precursor chemicals covertly, according to recent Reuters investigations.

In order to reduce delivery delays, USPS promised consumers in a statement that it is collaborating with CBP to expedite an effective tariff collection system.

There are no planned Trump-Xi conversations due to the growing trade conflict.

President Trump and Chinese President Xi Jinping have not arranged a meeting to discuss the additional tariffs or Beijing’s retaliatory actions, despite the escalating tensions.

As the new tariffs went into effect at midnight Eastern Time on Tuesday, Trump said he was not in a rush to meet with Xi.

China has placed targeted duties on American coal, liquefied natural gas, crude oil, and agricultural equipment in retaliation for Trump’s trade policies. Beijing has also opened an anti-monopoly probe into Alphabet’s Google, indicating the possibility of more extensive punitive actions.

Economic Concerns and Tariff Uncertainty

The shipping and retail industries are unprepared for the sudden trade restrictions. Co-founder of the New York-based consulting firm Supply Chain Compliance, Maureen Cori, bemoaned the absence of official guidelines:

“There has been absolutely zero time for anyone to prepare for this. We need direction on how to handle this without warning or notice.” 

In the past, hundreds or thousands of de minimis goods were processed all at once in order to speed up customs clearance. Each shipment must now be cleared separately under the new regulation, which greatly increases the burden for brokers, customs officers, and postal services.

The exception was once created to help with commerce, but as internet purchasing has grown in popularity, so has its use. According to CBP data, the de minimis provision allowed almost 1.36 billion cargo to enter the United States in 2024, a 36% increase from 2023.

Policy and Economic Consequences

In his first interview with the media since assuming office, U.S. Treasury Secretary Scott Bessent supported Trump’s tariff policy, claiming that its goal is to reverse industrial migration from the U.S. toward local manufacturing.

The effects of the tariffs on the economy are being keenly watched by Federal Reserve officials in the meanwhile. It’s still too early to tell how cost hikes will be absorbed or passed on to consumers, according to Richmond Fed President Thomas Barkin, while Chicago Fed President Austan Goolsbee warned against underestimating their inflationary effects.

Businesses and policymakers are waiting for further information on how the changing tariff environment will impact international trade in the coming months as trade tensions between the United States and China intensify.