Article Summary –
President Trump’s decision to terminate the de minimis exemption, which allowed duty-free entry for packages valued under $800, is based on addressing national emergencies and economic concerns like the U.S. goods trade deficit. This action has caused several countries to halt shipments to the U.S., potentially disrupting consumer choice and creating challenges for small international businesses and U.S. consumers who rely on cross-border e-commerce. Experts predict that the change will result in reduced product variety and increased challenges for small businesses, with uncertain prospects for a reversal of the exemption under the current administration.
With President Donald Trump planning to end a major tariff exemption, consumers and small businesses are bracing for a shift in their purchasing habits. The de minimis exemption, allowing packages valued under $800 to enter the U.S. duty-free, is set to end on Aug. 29, affecting global imports.
Initially removed for shipments from China and Hong Kong in May, the exemption’s end now applies to all countries. However, gifts under $100 remain tariff-free. This change could significantly alter international buying habits and affect small businesses reliant on overseas goods.
Rudolf Leuschner, a Rutgers University supply chain management professor, explained, “The de minimis exemption meant that low-value items weren’t worth the effort for customs to track and charge duties.” Trump’s executive order cited national emergencies linked to drug smuggling as a key reason behind this change, despite reports indicating only 0.2% of illicit fentanyl enters through the Canadian border.
The order also mentioned persistent U.S. trade deficits and threats to national security to justify ending the exemption. In response, several countries, including Japan, Singapore, and the UK, have ceased parcel shipments to the U.S., though letters and some gifts under $100 may still be sent.
Austrian Post announced a halt on U.S. shipments effective Aug. 26, citing new customs regulations as the cause. “The rule that goods with a value of less than 800 US dollars may be imported duty-free has been abolished,” said a statement from the postal service.
Leuschner finds the suspension of shipments puzzling, as “customs duties are paid in the U.S. by the importer.” Jason Miller, a Michigan State University supply chain expert, predicts reduced product variety for American consumers, impacting their purchasing options.
Small businesses face disruptions too. CNN reported potential halts by international retailers and Etsy sellers to U.S. sales. Miller noted, “Cross-border e-commerce and small businesses shipping small quantities could suffer significantly.”
Before China’s exemption end, companies like Shein and Temu benefitted from the model of small package shipments to the U.S. Without the de minimis exemption, U.S. buyers might face delays or refusals from vendors like those on Etsy.
Miller suspects the exemption won’t return soon, though tariff regulations under Trump’s administration have been unpredictable. He remarked, “This looks like a revenue collection effort by the administration and is unlikely to change unless businesses strongly oppose.”
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