KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Key Takeaways:
De minimis exemption abolished: All imported packages, regardless of value, now face tariffs, ending a decades-old rule that exempted shipments under US$800.
Impact on e-commerce: Online retailers like Shein and Temu face higher costs and paperwork, potentially eroding their price advantage.
Winners and losers: US textile and manufacturing industries gain tariff protection, while consumers and small businesses importing via online platforms face higher prices.
Revenue and enforcement: White House estimates US$10 billion annually in new tariff revenues, with CBP already collecting nearly US$500 million since China/Hong Kong exemptions ended in May.
Transition risks: Supply chain disruptions likely as postal agencies and express carriers adapt; full ad valorem duty collection required by Feb 28, 2026.
Policy Shift
The de minimis exemption, dating back to 1938, allowed small-value imports duty-free. Raised to US$800 in 2015, it facilitated the boom in cross-border e-commerce.
Trump administration eliminated the exemption for China and Hong Kong in May, targeting fentanyl and fast-fashion imports. Now extended globally, effective Aug 29.
Flat-rate duty option introduced temporarily:
US$80 per parcel (duty rates <16%) – e.g., UK, EU
US$160 per parcel (16–25%) – e.g., Indonesia, Vietnam
US$200 per parcel (>25%) – e.g., China, Brazil, India, Canada
Transition period until Feb 2026, after which all shipments must pay full tariff rates based on value.
Market and Business Impact
E-commerce platforms (Shein, Temu) most affected — their direct-to-consumer model relied on shipping millions of low-value parcels duty-free.
Traditional retailers (e.g., Walmart, Target) less impacted, as bulk imports already pay tariffs. This could level the playing field in pricing.
Logistics providers (FedEx, UPS, DHL) better positioned than postal services to handle new customs processes. However, smaller postal services may suspend shipments to the US.
Consumers and SMEs face higher prices, delivery delays, and more paperwork.
Strategic Considerations for Investors
Retail sector: Expect margin pressure on cross-border e-commerce firms, potential shift in market share back to established retailers.
Textiles and domestic manufacturing: Policy is a net positive, reducing competition from tariff-free imports and improving pricing power.
Logistics sector: Large express carriers may benefit from added customs processing demand, but short-term volumes could be disrupted.
Inflationary risk: Higher import costs could add mild upward pressure to consumer prices in discretionary categories.
Investor Takeaway
The end of the de minimis exemption marks a structural change in U.S. trade and e-commerce flows. While it supports U.S. manufacturers and raises tariff revenues, it introduces higher costs for consumers and uncertainty for global supply chains. Investors should monitor how quickly e-commerce platforms adapt — either by shifting to bulk shipping or absorbing tariff costs — as this will shape competitive dynamics in U.S. retail.
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