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.
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 suspensions of U.S.-bound shipments.
Mexico's postal service announced Thursday it was suspending package deliveries to the United States because of the pending changes.
U.S. e-commerce hubs have been posting 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.
“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 may have to find alternative shipping processors to get their products to U.S. customers. Canada Post said Thursday it had contracted with a third-party duty processor to keep parcels flowing into the United States.
Private, third-party carriers that may already have tariff-collection systems can cost as much as four times the cost of sending an item by 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.
Ben 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.
A few days after he made the purchase, he got an email from American Express saying the order would be refunded. An email to the online music store revealed why.
“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.”
While foreign postal systems have no problem making deliveries to the United States, they don’t have systems to process tariffs and pay them into 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 aren't 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.”
Senior administration officials said Thursday that countries that have suspended parcel shipments into the United States represent only a small fraction of de minimis shipment volumes and that they are making a “business decision” that will ultimately harm them financially if they choose to close off their services to the U.S. market.
Peter Navarro, the Trump administration's senior counselor for trade and manufacturing, told reporters that ending the de minimis exemption would bring in billions in revenue, create thousands of jobs, boost U.S. businesses and save lives by restricting the flow of drugs, contraband and unsafe products into the United States.
Studies have shown that de minimis shipments to the United States exploded after Trump first imposed tariffs on China during his first term as Chinese suppliers began to use the system 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 column last year.
The U.S. textile industry has praised the move to end the de minimis exemption, saying said foreign competitors have used it to undermine its industry.
"For years, companies have used this loophole to avoid tariffs and customs reporting requirements on shipments valued at $800 or less, devastating U.S. manufacturers, undercutting American jobs, and opening the floodgates to unsafe and counterfeit products and goods made with forced labor," Kim Glas, president and CEO of the National Council of Textile Organizations, said in a statement.
China accounted for more than half of all packages with de minimis exemptions — with more than 30% coming from China’s low-cost shopping platforms, such as Temu and Shein. The exemption 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.
Administration officials said that closing the exemption for the rest of the world — including countries that may have served as so-called trans-shipment hubs China uses to get around U.S. trade barriers — will help increase the new rule's impact.
U.S. small-business owners who source orders from abroad are also being affected, said Matthew Hertz, founder of Third Person.co, a logistics group. Such firms that may have been relying on low-cost shipping of products from countries like 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.
