Small business owners across the pond in the UK are making their opposition heard. Note that recent changes in US customs regulations have made drastic, negative effects on their exporting environment for their goods. The $800 de minimis exemption has been permanently ended. The unintended consequence is that many of those same entrepreneurs have ceased shipping low-value goods to American customers because they are now subject to these new border taxes.
Sophie Arnold, who operates the Little Vintage Emporium, a small jewellery business based in Edinburgh, discontinued shipping to the US upon learning that the exemption was coming to an end. Her statement expressed her frustration because the amendment is a direct attack on her ability to serve a critical market. Now under the new regulations even parcels worth less than $800 are subject to this tax. They too will be subjected to a new 10% tariff, like all other products imported from the UK.
Helen Hickman, owner of Nellie and Eve, a hand-dyed wool company based in Carmarthenshire, dystopia west wales, agreed with this, adding. Her business had come to depend on American customers for 30% of its sales. Now, given the uncertainty around the new costs, she has temporarily stopped US sales. Hickman indeed registered his aggravation toward the disorderly new taxation application. To which he confidently answered, “I knew it was going to be a total complete clusterfuck.” Because it has been so unclear what she might get charged with, she has not felt comfortable offering her products across the Atlantic.
Hickman elaborated on her struggles with the new regulations: “I didn’t have enough information to be able to comfortably say that I could ship as normal.” The lack of ability to give customers clear, cost-estimated upfront makes her life even more business operation-more difficult. “There’s no way of providing the customer with an immediate price,” she said. For example, she recently has been frustrated by hefty fees and missing deliveries. That’s why she chose to cap her exports, explaining, “I didn’t want products being overcharged or sent back to me or lost.”
Jay Begum is the owner of a small, London-based business, Knots of Pine. She’s having a big challenge under the new tax structure. With America as her largest market, her focus went back to 100% on domestic sales. Today, that’s exclusively the UK market, she says. The service regulatory changes have made her dial back her international dreams.
The adjustments come after a move by former President Donald Trump, who eliminated the de minimis exemption. This amendment has since caused UK small businesses to wrestle with higher costs of doing business and many logistical chaos. Figures from HMRC demonstrate that there were over 28,000 different small businesses that exported goods to the US in 2023. This points to just how crucial the US market is for many of these entrepreneurs.
Tina McKenzie, policy chair of the Federation of Small Businesses (FSB), has called for a reevaluation of existing trading allowances. She suggested tripling the Trading Allowance from £1,000 to £3,000. This adjustment is part of a broader effort to relieve the financial strain on small exporters. McKenzie emphasized the detrimental effects tariffs have already had on small UK businesses. She noted that over 20% have already ceased exporting to the US or are planning to cease entirely.
Small businesses in the UK have already been affected by US tariffs, McKenzie said. She emphasized the need for the UK and US governments to work together. It will reduce trade costs and facilitate more efficient trading processes for small businesses. She continued, “The UK and US should work together. Working together, they can do more to ensure that small businesses can more easily reach customers across the Atlantic.” That requires realistic, transparent, and practical rules – with time to adjust – and effective systems that ensure the flow of trade continues.
McKenzie, who noted the recent US government decision to remove the de minimis threshold. This one alteration to the law has made life even more difficult for exporters. Through a brief testimony, she shared how the US Administration made a unilateral decision to eliminate the de minimis threshold. Combined with postal carriers suspending deliveries temporarily, this will raise costs and impose new barriers.
McKenzie’s hot buttons are eliminating the non-compete trade allowances and establishing bright line tax rules. His mission is to be a helpful resource to our nation’s small businesses while they take on these rocky waters. Her message underscores an important and urgent need for reforms. These modifications will allow America’s entrepreneurs to better absorb the additional costs imposed by tariffs and stay connected to global markets.