One of the major battlefield of tariff war is in small parcels for it increased tremendously after the pandemic and is nearly doubling every year. Since the pandemic, people work from home and stay at home and also buy at home in the internet. Online shopping become a new trend but there is a grey area to facilitate the trade, for all goods sell to US when under the total value of US$800 are free from tariff. So the demand of daily consuming products grew greatly.
But the 145% tariff of US is nearly equals to embargo, that China must turn to some other countries. Besides the US, the strongest consuming power should be EU, so now they are facing large amount of inflow of excess Chinese goods. In the EU, the level of free tariff for small parcel is Euro 1,500. Those goods that could not be sold to US would turn to EU, but before that already a lot of parcels were sending to EU.
Besides original small parcels, some daily consuming products are also stuck on shipping yards of China, and of course for light products they would also try to be sent by parcels thus made the workload much heavier than before. Now the EU is also facing another new problem, the original manufacturers lost their orders and now making way to open a new line that is to sell the imitation products of famous brands at a new brand where the price is just 5% or less of the original product, and the imitation appearance is quite high that people hard to tell the fake from real.
Even the policy was announced in February, but the effective day is on May 2nd, for its needs some times to change the computer system and explain the regulations to clients. So when it is a few days ahead of the deadline, the problem will be greater and greater.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.