United Parcel Service (UPS) announced a decline in profit and revenue in the second quarter of the year. The main reason for this decline was the new “de minimis” tariffs applied to low-value shipments from China and the uncertainties stemming from President Donald Trump’s trade policies.
In May, the White House began applying tariffs to previously tax-exempt shipments from China under $800. Although this rate has been reduced from 120% to 54%, a decrease in consumer demand is expected.
According to experts, the removal of this exemption could create a larger-than-expected contraction in one of UPS’s most profitable routes, the China-US e-commerce traffic. This could lead to a decrease in purchases from affordable platforms such as Shein and Temu.
The company has not updated its annual expectations for the second consecutive quarter.
In its last forecast in January, it announced a revenue target of $89 billion for 2025.In the quarter ending in June, adjusted net income per share was $1.55; this figure was $1.79 in the same period last year.
UPS and its rival FedEx are seen as important indicators of the health of the global economy. However, UPS shares have lost more than 19% of their value since the beginning of the year, while FedEx shares have also fallen by approximately 14%.
