WASHINGTON (AP) — President Donald Trump has opted to temporarily hold off on imposing tariffs on low-value packages arriving from China. The decision seemingly aims to grant federal agencies enough time to determine how to effectively process the millions of such shipments that enter the U.S. daily without incurring taxes.

The executive order, issued on Wednesday, does not specify a timeline for lifting the pause but states that it will remain in place until the Department of Commerce establishes “adequate systems” capable of “efficiently processing and collecting tariff revenues.”

“This reflects how swiftly actions are being taken, sometimes before fully understanding the broader consequences of new regulations,” said John Lash, group vice president of product strategy at the supply chain firm e2open. He emphasized that Trump’s directive impacts a vast number of small packages, many of which are already en route.

“The sheer volume is staggering,” Lash noted. “Suddenly, these shipments shift from having no tariff filing requirements to needing complete documentation, which is an intricate process.”

Revoking tariff exemptions for inexpensive packages from China enjoys bipartisan support in Washington. Trump brought about this shift while imposing a 10% tariff increase on Chinese imports earlier in the week. Items shipped through duty-free packages are now subject not only to existing tariffs—25% on many Chinese goods—but also to the additional 10% tariff.

This suspension marks yet another momentary break in Trump’s policy implementations during the early months of his second term. Similar pauses were seen with tariffs on Mexico and Canada, which were halted after both nations took steps to address his concerns on border control and drug smuggling.

The U.S. Postal Service, tasked with tariffs collection for small parcels, initially announced on Tuesday that it would stop accepting packages from mainland China and Hong Kong. However, the following day, it reversed the decision, stating that it would collaborate with Customs and Border Protection to enforce an appropriate collection strategy for the new tariffs.

“Quick regulatory changes often take people by surprise,” Lash remarked.

The "de minimis exception," introduced in 1938, was originally designed to facilitate the movement of small shipments valued under $5 (equivalent to approximately $106 today). The threshold was raised to $200 in 1994 and later to $800 in 2016. However, the exponential rise of cross-border e-commerce—particularly from China—has strained the intention behind the long-standing trade provision.

According to a Congressional Research Service report released last week, Chinese exports of low-value packages surged from $5.3 billion in 2018 to $66 billion in 2023. The U.S. has remained a key market for these goods.

In a historic first, more than 1 billion small packages cleared U.S. customs in 2023, a significant jump from 134 million in 2015. By late last year, U.S. Customs and Border Protection reported handling nearly 4 million such shipments daily, mostly from Chinese e-commerce platforms like Shein and Temu.

Critics argue that the exemption has enabled tariff evasion and contributed to an influx of counterfeit goods and illicit substances. Proponents, however, contend that it has helped keep consumer prices low for Americans and supported small businesses.

With Trump revoking the exemption, some analysts warn that the rule change could result in price hikes and shipping bottlenecks as customs officials face a wave of additional package screenings.

“We are dealing with millions of shipments per week that currently go through customs as if they were routine domestic deliveries,” said Neil Saunders, managing director at research firm GlobalData.

He noted that Temu has already adapted by expanding its U.S.-based warehousing and transitioning to shipping goods in bulk containers.

Lash suggested that eliminating the de minimis exemption would reshape international e-commerce, leading foreign vendors to favor bulk shipments over individual parcels as a way to offset increased costs from tariffs and filing requirements.

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Hadero reported from South Bend, Indiana.