Introduction to Trade Rule Change
U.S. shoppers ordering smaller goods from abroad are being met with waves of cancellation notices ahead of a key trade rule change ordered by the Trump administration.
On Friday, the United States will end the nearly century-old de minimis exemption, which allowed items worth less than $800 to be shipped to the country duty-free, or without having to pay any tariffs.
Impact on International Shipments
In advance of the official termination date for the exemption, many European nations, alongside Australia, India, Japan, South Korea, Taiwan, Thailand and New Zealand, have announced temporary suspensions of U.S.-bound shipments.
U.S. e-commerce hubs have since posted notices warning customers about shipping disruptions. Last week, Etsy announced it would no longer process purchases for goods sent via Australia Post, Canada Post and the United Kingdom’s Evri and Royal Mail services, in anticipation of those firms shutting down U.S. deliveries.
Shipping Disruptions and Alternatives
“Given the complexities, legal requirements, and poor experience, many postal providers will be suspending” delivery options to the U.S., Etsy said.
Online auction site eBay has likewise warned that sellers who rely on foreign postal services will have to find alternative shipping processors to get their products to U.S. customers.
But private, third-party carriers which may already have tariff-collection systems in place can cost as much as four times the amount of sending an item via regular post, said Alison Layfield, vice president of product development at ePost Global, a California-based logistics firm.
“Customers are going to be very shocked,” she said.
Challenges for Consumers and Businesses
Administration officials have argued that anyone affected by the change should simply switch to U.S.-based suppliers. But cases like that of record collector Ben Jay show why that can’t always happen.
Jay, a New York City resident who works in graphic design, recently stumbled upon an online German music store selling a rare modern recording of traditional Japanese music. An exhaustive search revealed it didn’t exist anywhere else, he said.
But a few days after making the purchase, he received an email from American Express saying the order would be refunded. An email to the online music store revealed the reason.
“They just said they were nervous about following the law,” Jay said of the site, recordsale.de. “It’s annoying but understandable. The way all this is being implemented — there’s so much uncertainty.”
Reasons Behind the Trade Rule Change
While foreign postal systems have no problem making deliveries to the U.S., they don’t have systems in place to process a tariff and pay it into the U.S. Customs and Border Protection, Layfield said.
In essence, the Trump administration is now asking foreign mail carriers to act as import tax collectors on behalf of the U.S. government — something they are not set up to do, or may be refusing to do, she said.
“Why would a foreign post collect from a local business for a foreign country’s customs?” Layfield said. ”It’s not something that anyone has done before.”
The White House did not respond to a request for comment. Trump has claimed the elimination of the de minimis rule is necessary because it has helped facilitate the international drug trade, especially fentanyl.
Effects on Global Trade
Studies have shown that the U.S. saw an explosion in de minimis shipments after Trump first imposed tariffs on China during his first term as Chinese suppliers began to use it as a workaround.
“In warehouses in Northern Mexico, goods imported from China are repackaged into smaller parcels, each valued at less than $800, allowing them to enter the US tariff-free under the de minimis rule—a practice known as the ‘Tijuana two-step,’” trade economist Anne O. Krueger wrote in a 2024 column.
China accounted for more than half of all packages with de minimis exemptions — with more than 30% from China’s low-cost shopping platforms, such as Temu and Shein. The de minimis exception for Chinese goods ended in May, and Temu and Shein both saw online traffic from U.S. shoppers plunge — but U.S. Customs data shows no noticeable impact yet on the volume of drugs being seized at the border.
Many other countries have long relied on de minimis when shipping goods to U.S. shoppers. The Canadian Federation of Independent Business has estimated that 1 in 3 Canadian small- and medium-sized enterprises will be impacted by the change.
Conclusion
U.S. small-business owners who source orders from abroad are also being affected, said Matthew Hertz, founder of Third Person.co logistics group. Such firms who may have been relying on low-cost shipping of products from countries such as Mexico, Portugal or Turkey now face a new calculation.
“For small businesses that relied on cheaper shipping, the decisions involved with these new changes are really difficult to make,” he said.
President Donald Trump’s comprehensive and sweeping tariffs slate took effect, shifting his global trade reset into high gear.
FAQs
Q: What is the de minimis exemption?
A: The de minimis exemption is a rule that allows items worth less than $800 to be shipped to the U.S. duty-free, or without having to pay any tariffs.
Q: Why is the de minimis exemption being ended?
A: The Trump administration claims that the exemption has helped facilitate the international drug trade, especially fentanyl.
Q: How will the end of the de minimis exemption affect U.S. shoppers?
A: U.S. shoppers may face higher costs and longer delivery times for goods shipped from abroad, as foreign postal services suspend U.S.-bound shipments and private carriers become more expensive.
Q: What alternatives do U.S. shoppers have?
A: U.S. shoppers can consider switching to U.S.-based suppliers or using private carriers that have tariff-collection systems in place.
Q: How will the end of the de minimis exemption affect small businesses?
A: Small businesses that rely on low-cost shipping from abroad may face difficult decisions and increased costs due to the end of the de minimis exemption.
