Article Summary –
Trump’s decision to end the de minimis tariff exemption for packages valued under $800, effective August 29, has prompted significant reactions from multiple countries, including Japan, Singapore, India, the United Kingdom, and Switzerland, which have decided to pause shipments to the U.S. in response to the new regulations. The termination of this exemption is expected to impact consumers’ access to a variety of products and disrupt small businesses engaged in cross-border e-commerce, as the removal of duty-free status for low-value goods narrows options for American buyers and complicates shipping processes. Despite the potential negative implications for both consumers and businesses, the reversal of the de minimis exemption is perceived as part of the Trump administration’s broader effort to address trade deficits and generate revenue, with experts like Jason Miller predicting the measure will remain unless there is considerable pushback from affected entities.
President Donald Trump’s plan to end a significant tariff exemption is set to disrupt consumer and small business purchasing habits. Scheduled for Aug. 29, the de minimis exemption, which allowed duty-free entry of packages under $800, is ending. Initially removed for China and Hong Kong in May, the exemption will now be eliminated globally. However, gifts under $100 remain tariff-free.
Rudolf Leuschner, a supply chain management professor at Rutgers University, describes the de minimis exemption as a way for low-value items to bypass customs duties, as tracking and charging would be inefficient.
Trump’s executive order cites national emergencies involving alleged drug influxes and trade deficits as reasons for ending the exemption. Despite claims of massive fentanyl entry via Canada, CNN reported in February that only 0.2% of illicit fentanyl is seized at the Canadian border.
Countries like Japan, Singapore, India, the UK, and Switzerland announced they would halt parcel shipments to the U.S., although letters and gifts under $100 might still be sent. Austrian Post stated it would stop accepting goods for the U.S. due to regulatory changes.
Leuschner finds it surprising that some nations ceased shipments, as customs duties are paid by importers in the U.S., not the sellers.
Jason Miller from Michigan State University anticipates reduced product variety for American consumers, impacting their choice and availability of desired items. Small businesses might face disruptions, with many international retailers considering halting U.S. sales, according to CNN.
Miller states this move will negatively impact cross-border e-commerce and small businesses engaging in both business-to-consumer and business-to-business shipments. The de minimis exemption removal particularly affects Chinese retailers like Shein and Temu, who depended on sending small packages to the U.S.
If you try ordering from the U.K. on Etsy, delays could occur, warns Miller. Despite potential fallout, he doubts the exemption will return soon, noting changes in tariff rules under Trump’s administration are common.
Miller suggests the administration is seeking new revenue sources, and unless businesses protest significantly, the de minimis exemption won’t likely return.
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