US Ends $800 Duty Exemption for Small Parcels Permanently

End of De Minimis Exemption

• 📌 The United States is permanently ending its duty exemption for packages valued below $800 starting Friday.
• ⚠️ This policy change, confirmed by administration officials, will affect how postal services and package shippers worldwide send items to the US.

Reasons for the Policy Change

• 💰 White House trade adviser Peter Navarro stated the move aims to raise revenue and help stem the flow of fentanyl into the country.
• 📈 From now on, the US will collect normal duty rates on all shipments.

Transition Period and Duty Rates

• 🗓️ A six-month transition period allows shippers to pay a flat duty rate between $80 to $200, varying by country of origin.
• ⚖️ The lower rate applies to countries with existing duties below 16% (e.g., UK, EU), while the higher rate applies to countries with tariffs above 25% (e.g., China, India, Canada).

Impact on Businesses and Consumers

• 🛒 The de minimis tariff exemption, in place since 1938 and raised to $800 in 2015, had fostered growth for e-commerce businesses, particularly Chinese retailers like Temu and Shein.
• 🚚 This also generated significant business for parcel carriers such as FedEx and UPS, who will now be responsible for collecting duties and processing paperwork.
• 🌍 Some global postal services, including those in Japan, South Korea, Australia, and several European countries, have suspended shipments to the US temporarily while they adapt to the new regulations.