Beijing, China - Beijing warned against US "blackmail" as a new report revealed that cheap shipments from China have dramatically dropped since Washington cracked down on a tax-free loophole.

A new report on air cargo shipment volume from Asia to the US revealed a 10.7% decline in May after Washington canceled a tax-free exemption for imported low-value packages.

The loophole saw shipments valued under $800 placed under the "de minimis" (too small to matter) rule, effectively exempting them from tax. This exemption has long been used to drop-ship cheap Chinese products into the US.

Since the rule was revoked, these shipments have been taxed at a high rate based on President Donald Trump's "Liberation Day" tariff regime. The tariff was reduced from 145% to 30% in May.

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This week, negotiations between China and the US saw restrictions lifted on the export of electronic design automation software and ethane gas.

Progress was stymied, however, by a trade deal signed between Vietnam and the US. The deal angered Beijing, which insisted that "agreements should not target or harm the interests of third parties."

China on Friday warned against "blackmail and coercion" if Washington wants to continue de-escalating its self-inflicted trade war.

"Currently, both teams are working quickly to implement the results outlined in the London framework," China's Commerce Ministry spokesperson said in a statement.

Beijing is now "reviewing applications for export licenses of controlled items that meet the requirements."

"The US side is also taking corresponding actions and has lifted a series of restrictive measures against China, the details of which have been communicated to the Chinese side," the spokesperson said.

"We hope the United States will... continue to work in the same direction as China and further correct its erroneous practices."