The United States has cancelled a decades-old tariff exemption that allowed parcels under $800 to enter duty-free, transforming e-commerce.<\/p>\n\n\n\n
From Friday, small shipments will face customs checks and tariffs. Millions of packages daily will be affected.<\/p>\n\n\n\n
Customs data shows that in 2023 nearly 1.4 billion packages worth over $64bn entered the US under the de minimis rule. Experts warn higher prices, fewer choices, and significant challenges for small businesses.<\/p>\n\n\n\n
Katherine Theobalds, founder of Buenos Aires shoe brand Zou Xou, said: \u201cIt might be the end for us.\u201d<\/p>\n\n\n\n
The de minimis exemption began in 1938 to avoid collecting minor tariffs that cost more than they generated.<\/p>\n\n\n\n
Its rising threshold over decades supported e-commerce growth and allowed global retailers to ship directly to US consumers.<\/p>\n\n\n\n
Companies such as Shein and Temu relied on the exemption to deliver low-cost goods straight from factories.<\/p>\n\n\n\n
Many other domestic and international firms also built supply chains and pricing strategies around it.<\/p>\n\n\n\n
Coach parent Tapestry expects a $160m profit hit this year, with one-third tied to the exemption\u2019s removal.<\/p>\n\n\n\n
Officials report over 90% of US-bound cargo previously benefited from de minimis.<\/p>\n\n\n\n
Both Donald Trump and Joe Biden criticised the policy, arguing it hurt US firms and enabled smuggling.<\/p>\n\n\n\n
Trump adviser Peter Navarro said ending it will reduce fentanyl shipments and bring $10bn annually to federal revenue.<\/p>\n\n\n\n
Trump accelerated the repeal via executive order, cancelling its planned 2027 expiry.<\/p>\n\n\n\n
Shippers must now pay tariffs by country of origin or use a temporary flat fee of $80\u2013$200 per parcel for six months.<\/p>\n\n\n\n
China and Hong Kong lost the exemption in May, prompting Temu to halt US sales. Gifts and letters under $100 remain exempt.<\/p>\n\n\n\n
Consumers may face reduced product choice and longer shipping times as businesses adjust.<\/p>\n\n\n\n
Small exporters must now document the origin of every material, said logistics expert Tam Nguyen. That adds complexity and slows shipments.<\/p>\n\n\n\n
Some niche items may disappear as sellers avoid costly compliance.<\/p>\n\n\n\n
Portland vinyl collector Christopher Lundell had a $5 UK record order cancelled. He called the suspension \u201cpolitical theatre\u201d but understood the goal of protecting US businesses.<\/p>\n\n\n\n
Postal services across Europe and Asia paused shipments to the US due to uncertainty over the new rules.<\/p>\n\n\n\n
Tariffs now vary by country of origin.<\/p>\n\n\n\n
Goods from the UK and Australia face 10%, while shipments from Brazil or India may reach 50%.<\/p>\n\n\n\n
Flat duties range from $80 for low-tariff nations to $200 for higher-tariff ones.<\/p>\n\n\n\n
Officials say the policy strengthens the economy and improves safety for Americans.<\/p>\n\n\n\n
Some US companies welcomed the move. Gap Inc. said closing the loophole ensures all retailers pay fair duties.<\/p>\n\n\n\n
Trade expert Deborah Elms warned small firms face costly audits and may rely on expensive couriers, raising prices further.<\/p>\n\n\n\n
UK retailer Wool Warehouse paused US shipments, warning prices could rise 50%. The company will display tariffs online for transparency.<\/p>\n\n\n\n
At Zou Xou, Theobalds said she must rethink her business model. \u201cEven if prices remain stable, complex duties may discourage buyers,\u201d she said.<\/p>\n\n\n\n
US retailers like Walmart and Target could benefit if imported goods become more expensive.<\/p>\n\n\n\n
Chinese firms may adapt faster. Shein and Temu operate US distribution centres to reduce tariff impacts.<\/p>\n\n\n\n
Nguyen said Chinese exporters are months ahead in handling paperwork compared with competitors.<\/p>\n\n\n\n
For smaller businesses, the repeal removes an easy, low-cost entry into the US market. \u201cThat pathway is gone,\u201d Nguyen said.<\/p>\n\n\n\n
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