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De Minimis Minimized; Boom for Tariff Refuge; Finns Help Break the Ice By Mark R. Long

The Trump administration dialed down trade tensions further, cutting tariffs on lower-value packages from China and Hong Kong.

The WSJ's Gareth Vipers and Jiahui Huang write that the White House late Monday ordered the "de minimis" duty on shipments from China and Hong Kong reduced to 54% from 120% . The de minimis exemption allows companies to avoid import taxes on international shipments with a retail value of less than $800. Before suspending it for China as of May 2, it had fueled the rise of Shein, Temu and other e-commerce companies. Its loss forced online retailers to raise prices and rethink their business models.

Importers, shipping companies and global markets welcomed the 90-day reprieve agreed to by the U.S. and China to roll back tariffs. Many companies said they would quickly get their goods onto ships destined for American ports, the Journal's Suzanne Kapner, Ruth Simon and John Keilman report. But don't count on a massive renewed surge of trans-Pacific container shipments , said Gene Seroka, the executive director of the Port of Los Angeles. Companies that supply critical goods such as healthcare products as well as toy makers and other seasonal-product purveyors might take this moment to restock, he said. The National Retail Federation also said some retailers might find some relief from the cut in the base tariff on Chinese goods to 30% from 145%, the WSJ Logistics Report's Liz Young writes. However, the tariff cut is unlikely to spur frontloading of the sort that sent container shipments surging ahead of the "Liberation Day" duties, Seroka said. The effect of new tariffs has been stark, with Seroka saying he expects imports to the port to end May down 25% year-over-year.

Economists and analysts share six takeaways on the tariff agreement. (WSJ) The temporary lifting of triple-digit trade levies removes the threat of an immediate stagflationary hit to the economy, and shows the Treasury Secretary is in control of trade policy. (WSJ) Freight forwarders warned of higher spot rates , surcharges and shortages of space on ships as shipments from China to the U.S. are unlocked in the coming weeks. (Journal of Commerce) Trump's Tariffs: Where Things Stand

President Trump backed away from the biggest tariffs of his trade war, agreeing to temporarily cut new levies on Chinese imports for 90 days to 30% from 145%. Beijing agreed to lower its reciprocal duties on U.S. goods to 10% from 125%. Many other new tariffs remain in place. Here is where the president's actions and proposals stand .

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Foreign-Trade Zones

The trade war has brought on boom times for the ultimate U.S.-based tariff refuges: Foreign-trade zones.

The WSJ's Owen Tucker-Smith writes that companies can import products temporarily tariff-free while they are stored or used to assemble other goods at warehouses in these zones. Since Trump's tariff blitz began, inquiries have quadrupled at the U.S.'s roughly 260 FTZs. One of these warehouses in Arizona is teeming with new business from companies stashing aluminum poles, ice picks, carabiners, firearm safes and other imported items. FTZs have been around since 1934, when they were allowed to ease some of the effects of the Smoot-Hawley tariffs. FTZ operators charge companies setup and storage fees, which are small compared with the upfront tariff bills some importers face.

The facilities don't solve all tariff challenges: If duties go down, as they did with China on Monday, companies will still be on the hook for the amount assessed when their goods entered an FTZ.

Number of the Day Opening the Arctic

President Trump sees future commerce and possible conflict in the Arctic. As countries race to access its thawing seas, he has called for the U.S. to make a new fleet of icebreakers. The Journal's Daniel Michaels writes that engineers in Finland are lining up to help .

With much of its trade shipping via the ice-prone Baltic, Finland has mastered the tricky business of designing and building these specialized vessels. One Finnish company, Aker Arctic, uses a 246-foot-long ice-simulation tank to design ships for Canada, Sweden and other countries, and wants to play a role in U.S. plans, too. America could use the help after struggling to build icebreakers itself. Trump, after a recent meeting with Finland's president, said in a social media post that he wanted to strengthen ties, and that includes the purchase and development of a large number of icebreakers.

Moscow and Beijing are looking to expand their cooperation in shipping and energy projects in the Arctic, Russian President Vladimir Putin said at a meeting with Chinese leader Xi Jinping. (gCaptain) In Other News

The retail-property market's multiyear rebound is fizzling , buffeted by large retailer bankruptcies, shoppers pulling back and tariff turmoil that is slowing demand. (WSJ)

Amazon added FedEx as a partner to deliver select large packages to homes for the online retailer. (WSJ)

Apple is weighing price increases for its fall iPhone lineup, a step it is seeking to couple with new features and design changes and not attribute to tariffs. (WSJ)

Koch's venture-capital arm led a $40 million round into fleet-management software startup Optimal Dynamics in a bet on AI-powered logistics technology. (WSJ)

Chinese battery giant Contemporary Amperex Technology is planning to raise as much as $4 billion in the year's biggest listing in Hong Kong. (WSJ)

Danone agreed to buy a majority stake in Kate Farms, a California producer of plant-based nutritional formulas. (WSJ)

The U.S. is suspending imports of cattle, horses and bison from Mexico to slow the northward spread of New World screwworm, a flesh-eating fly. (Bloomberg)

The U.S. Coast Guard released new rules to streamline the process for foreign ships to reflag under the American registry. (Maritime Executive)

United Parcel Service will levy a surcharge on U.S.-to-Canada shipments for several services starting May 18, ahead of a possible Canada Post strike. (Supply Chain Dive)

Russian rail-freight volumes fell 8.6% to a 16-year low , a drop Russian Railways blamed on the weak national economy. (International Railway Journal)

CSX reached a tentative agreement with the Brotherhood of Locomotive Engineers and Trainmen on a five-year contract covering about 3,400 workers. (Dow Jones Newswires)

About Us

Mark R. Long is editor of WSJ Logistics Report. Reach him at [mark.long@wsj.com]. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long , Liz Young and Paul Berger .

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

May 13, 2025 07:17 ET (11:17 GMT)

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