Tensions between the US and China have soared in recent days as the world's two largest economies slapped a volley of tariffs on each others' imports, hitting hundreds of billions of dollars in trade.

As part of Trump's tariffs -- which he enacted citing drug trafficking concerns -- the United States on Tuesday scrapped a duty-free exemption for low-value packages.

The "de minimis" exemption allows goods valued at $800 or below to enter the United States without paying duties or certain taxes, but it has faced scrutiny due to a surge in shipments in recent years.

The US Customs and Border Protection agency said last month that exemption shipments rose to over 1.36 billion in fiscal year 2024, creating challenges for its enforcement of trade laws, health and safety requirements, intellectual property rights, and consumer protection rules.

US officials have pointed to the growth of Chinese-founded online retailers Shein and Temu as a key factor behind the increase -- and Tuesday's halt threatened major delays to parcels from both companies from entering the country.

The developments at the USPS came as the latest data showed the US trade deficit swelled last year to its second-largest on record, a metric that Trump has used in the past to justify trade battles with China and others.

In an apparent climbdown, the USPS on Wednesday morning said it would "continue accepting all international inbound mail and packages from China and Hong Kong Posts."

"The USPS and Customs and Border Protection are working closely together to implement an efficient collection mechanism for the new China tariffs to ensure the least disruption to package delivery," it added, without further details.

Beijing had responded with fury to the move, accusing the United States of "politicizing trade and economic issues and using them as tools."

Vowing to "take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies," foreign ministry spokesman Lin Jian accused Washington of "unreasonable suppression."

AFP has reached out to Shein and Temu for comment.

Other retailers such as Amazon might also be impacted by the "de minimis" removal.

The low-cost retailers took another hit Wednesday as the European Commission announced it would seek to impose new fees on e-commerce imports -- the bulk of which come from China.

The measures are part of efforts to tackle a surge of "harmful" products into the bloc.

- Tariff standoff -

Tuesday saw Beijing say it would impose levies on imports of US energy, vehicles and equipment in a return salvo minutes after Trump's threatened tariffs on Chinese goods came into effect.

A day earlier, Trump suspended duties on Mexico and Canada for a month after both countries vowed to step up measures to counter flows of the drug fentanyl and the crossing of undocumented migrants into the United States.

Beijing's moves hit roughly $20 billion worth of US goods per year -- roughly 12 percent of total American imports into China, according to calculations by Capital Economics.

But their impact is a far cry from US tariffs announced over the weekend, which will affect some $450 billion worth of goods.

Although earlier it appeared that US parcels could still be sent from Macau, by Wednesday evening the semi-autonomous Chinese city's post office announced that its service was also suspended.

Trump had signalled earlier that the talks with Xi could take place early this week, but addressing reporters at the White House Tuesday afternoon, he said he was in "no rush."

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