(Reuters) -United Parcel Service reported a decline in second-quarter profit and revenue on Tuesday, as demand took a hit from new "de minimis" tariffs on low-value Chinese shipments and mounting risks from President Donald Trump's trade policies.
The White House in May began collecting tariffs on shipments under $800 from China that were previously duty-free. While those levies were reduced to 54% from 120% as part of a trade truce, consumer demand is still expected to take a hit.
Experts believe
the removal of the exemption likely creates a greater-than-expected volume headwind for the company's international segment, as customers may cut back on discretionary online purchases, reducing shipments from bargain e-commerce sellers such as Temu and Shein on UPS's most profitable China-U.S. trade lines.
The company did not update its full-year outlook for a second straight quarter, citing ongoing macroeconomic uncertainty. In its last forecast, issued in January, UPS projected 2025 revenue of $89.0 billion.
It reported adjusted net income of $1.55 per share for the quarter ended June 30, from $1.79 per share a year earlier.
UPS and rival FedEx are seen as bellwethers for the health of the global economy as they serve clients across industries and geographies.
Shares of UPS were down 1.4% in premarket trading. They have fallen more than 19% since the start of the year, compared with a near 14% fall in shares of FedEx.
(Reporting by Abhinav Parmar in Bengaluru; Editing by Devika Syamnath)
