What Does the End of De Minimis Mean for Online Shopping?
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Several months ago, in a flurry of reporting on the effects of President Trump’stariffs, my colleagueErin Schwartzwrote a piece on the impending end of thede minimis exemptionon goods from China, which took effect this past May. As of today, the loophole is ending everywhere else, too.
What is the de minimis exemption?
Since the late 1930s, the policy allowed packages worth less than a certain amount to enter the United States tariff-free. For a long time, the threshold was $200 — and then, starting in 2015, $800. The more recent raise caused an explosion in foreign shipments: Some 1.36 billion packages were processed just last year, nearly a tenfold increase from 2015. This makes sense when you think about the massive popularity of direct-to-consumer shopping sites like Shein and Temu. Overall, China accounted for about half of the low-value shipments coming into the country.
What will happen now?
Senders of qualifying packages to the U.S. will be asked to pay the reciprocal tariff rate of their particular country of origin or pay a fixed amount ranging from $80 to $200. TheFinancial Timesreportsthat this second option will only be available for six months, as postal services set up systems to make this process go smoothly.
“In many cases, sellers will pass on the cost of the tariffs to the consumer in the form of higher prices,”according to the New YorkTimes.
Many shipments into the United States have already been suspended.
Postal services in more than 20 countries have announced a suspension of shipments coming into America, including Japan, the U.K., Australia, Singapore, Switzerland, Spain, Italy, Thailand, India, and Germany — among many others. (Newsweekhas a full list here.)
Some nations are calling their stoppages temporary as key questions still have to be answered, like how customs duties will be collected in the future and how that information will be passed on to the United States Customs and Border Protection. There are some small exceptions to what can be brought in (DHL, for example, is still couriering private packages worth no more than $100 and labeled a gift, and valuable items can be sent through DHL Express, a more expensive option that includes commercial customs services).
But overall, it’s a fairly plain takeaway among the chaos: Businesses will suffer, and goods are about to get even more expensive for consumers.
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