UPS Faces Profit Decline Amid New Tariffs on Chinese Shipments

Bengaluru, India – United Parcel Service (UPS) reported a decrease in second-quarter profit and revenue on Tuesday due to new tariffs on low-value shipments from China. The White House’s recent decision to impose tariffs on packages worth under $800 signals a shift in trade policy that is affecting demand.

The updated tariffs were reduced from 120% to 54% as part of a trade agreement; however, experts warn that consumer demand may still suffer. Analysts believe these changes could significantly impact UPS’s international business, particularly as customers may reduce discretionary online purchases. This is likely to hurt shipments from popular e-commerce platforms like Temu and Shein, which contribute to UPS’s revenue on U.S.-China routes.

UPS did not revise its full-year outlook for the second consecutive quarter, citing persistent uncertainties in the macroeconomic landscape. In January, the company projected a revenue target of $89 billion for 2025.

For the quarter ending June 30, UPS posted an adjusted net income of $1.55 per share, down from $1.79 per share from the previous year. As a key player in logistics, both UPS and its competitor FedEx are viewed as indicators of global economic health, servicing clients across various sectors.

Following the report, UPS shares dipped 1.4% in premarket trading. Year-to-date, the stock has plummeted more than 19%, outperforming FedEx, which has seen a nearly 14% drop in its share value.