As tariff exemptions for small packages and low-value items from the Chinese mainland and Hong Kong sent to the United States end on Friday, experts questioned whether new tariffs could prove workable, and urged local businesses to weather the storm by carving out new markets.

Shipments valued at $800 or less from the Chinese mainland and Hong Kong to the US now face 120 percent tariffs — or $100 per item — from May 2 to June 1, and then $200 per item effective June 1.

“Merchandise with a value totaling less than $800 is not a drop in the bucket. Instead, it’s related to hundreds of millions of shipments,” Ken Chung Hung-hing, chairman of the Chamber of Hong Kong Logistics Industry, told China Daily. “I don’t think the US is systematically prepared and well-equipped to enforce the policy. It will surely deal a huge blow to the US imports system.”

Meanwhile, the Ministry of Commerce said in a Friday statement that it was assessing the possibility of trade talks with the US. This marks Beijing’s first indication that it may be open to potential negotiations since Washington unilaterally initiated the tariff and trade battles.

Chinese exports of low-value single packages expanded from $5.3 billion in 2018 to $66 billion in 2023, according to the US Congressional Research Service. Nearly 1.4 billion packages entering the US claimed exemption from duties in 2024, representing more than 90 percent of all the cargo entering the US, with about 60 percent of those packages coming from China, as data from the US Customs Service showed.

“With the sheer size of shipments, I expect that the US will once again put the brakes on the policy move or lower the tariff in the short run,” Chung said.

In February, more than 1 million packages piled up at New York City’s John F Kennedy International Airport because of the lack of screening procedures. This chaos once prompted the US government to put the plan to end duty-free entry for Chinese goods worth less than $800 on hold.

Chung said the city’s logistics industry is now “taking a wait-and-see attitude” toward how such a customs exception will evolve. In April, Hongkong Post announced it would stop handling packages coming from or going to the US because of tariffs.

Direct-to-customer e-commerce retailers Shein and Pinduoduo-backed Temu have raised prices of some products by 40 to 100 percent to cover the tariffs, according to data platform Geekbi. But for promising e-commerce retailers in Hong Kong, most of which are small and medium-sized enterprises, they may feel the pinch.

Guo Hanbing, a researcher at the Institute of Finance of Chinese Academy of Social Sciences, said the sweeping tariffs highlight the pressing need to set up overseas warehouses to reduce the customs costs and to well-position businesses to cope with the tariff measures of target markets.

At the end of the day, Hong Kong’s exporters should realize “the global economy will be regionalized”, and good efforts should be made on diversifying supply chains and exploring new markets, said Wingco Lo Kam-wing, president of the Chinese Manufacturers’ Association of Hong Kong.