The broader “de minimis” tariff exemption expires this Friday. This poses significant burdens for small businesses that rely on international shipments. The Trump administration first suspended this exemption back in May. Specifically, it let in low-value packages (worth $800 or less) from China and Hong Kong without duties being paid. The impending end of this exemption marks a shift in President Donald Trump’s expansive trade policy, which has already impacted U.S. consumers and businesses.
Starting this week, companies from Maine to California will have to pay more to import goods from Mexico and Canada. The charge depends on the importing country’s tariff rate schedule. For countries with tariffs under 16%, you will pay $80 per collection item, while countries with tariffs over 25% could run as high as $200. This unexpected rise in costs will likely require companies to re-evaluate their shipping approaches and pricing structures.
International postal services have responded by moving very quickly to accommodate the changes. The Austrian Post recently announced an immediate suspension of all shipments to the U.S., effective August 21, due to the increased regulations. They went on to stress that these changes constitute significant hurdles for all postal operators around the globe when it comes to shipping goods to the U.S.
“There is currently insufficient information available on the customs clearance procedures that will be required in the future. This tightening of regulations poses major challenges for all postal companies worldwide when shipping goods to the USA.” – Austrian Post
The impact of the tariff exemption expiration reaches beyond postal companies to small business owners who rely on U.S. customers for their livelihoods. Many Etsy sellers are weighing the option of ceasing sales to customers in America. They don’t like the uncertainty in shipping costs or cross-state shipping regulations. For most of these companies, the U.S. makes up a huge share of their business income.
“Clearly this is not something we want to do. The U.S. is a significant part of our business. This decision is based on our current understanding of the rules.” – Wool Warehouse
Fears over rising costs have prompted some entrepreneurs to evaluate their alternatives. Shed Maid, who sells handmade products, expressed her fear of the economic impact posed by the new tariffs.
“It is going to have a huge impact on my business … I’m not sure what I’m going to do.” – Shed Maid
Other merchants, like Abbott Atelier Jewelry, are considering or already planning to take a temporary leave from their business. They mentioned plans to “pause shopping for a little while as we look for a solution” amid the uncertainty.
To put that into perspective, the U.S. Customs and Border Protection agency processes more than 4 million de minimis shipments each day. This is particularly timely, given how critical this exemption was to small businesses and consumers. Most recently, one of the Administration’s favorite tools – tariffs – have been applied on multiple trading partners. With Brazil’s rate at 50%—the highest in the world—many companies are bracing themselves for a painful transition.
The European and Asian postal services are moving on this. They even intend to stop shipments as soon as Monday, a testament to the extent of their alarm among the seafaring community worldwide.