End of "de minimis" exemption means new tariffs on millions of packages
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A USPS distribution center in Florida. Photo: Joe Raedle/Getty Images
Tariffs on small packages from around the world went into effect early Friday morning, with the end of the "de minimis" exemption on postal shipments to the U.S. worth less than $800.
Why it matters: Dozens of national postal services have stopped shipping to the U.S. altogether, because they say the government's new trade regime is simply too hard to decipher or implement.
- Even once that's all worked out, consumers could soon find themselves on the hook for billions of dollars in new fees.
How it works: From the Latin for a thing of "little importance," the de minimis exemption has historically meant that low-value shipments to the U.S. from other countries did not face tariffs, regardless of other levies on those products or from those countries.
Catch up quick: Earlier this year, President Trump ended the de minimis exemption for packages from China, which accounted for 60% of the roughly 1.3 billion such parcels last year.
- The exemption was key to the rise of low-cost Chinese merchants like Shein and Temu.
- In July, Trump issued an executive order ending it for the rest of the world.
- The administration believes closing the loophole will generate $10 billion in tariff revenue a year, as well as stem the flow of narcotics, counterfeit goods and weapons from other countries.
Zoom out: At least 29 European carriers have issued indefinite or temporary suspensions, or other cautions, about shipments to the U.S. due to the change, per trade group PostEurop.
- "Critical issues and processes, such as customs duties collection, the data to be collected, and the interaction with the U.S. Customs and Border Protection, are not yet clearly defined," the group said.
- Major Asian carriers like Japan Post have taken the same approach, as have Latin American agencies like Correos de Mexico.
- It's not clear how long some of these suspensions may last, though the administration accused national carriers of not being up to par with major international shippers on security.
Between the lines: The impact of the new rules and the international response is just starting to become clear, as American buyers of goods from yarn to cigars suddenly find themselves unable to get previously regular, small-dollar shipments.
- A Canadian developer of retro video game hardware took to social media to apologize to U.S. customers for cutting them off; a motorsport graffiti artist did the same.
What they're saying: Americans for Responsible Growth, an advocacy group of Democrat state and local finance officials, has taken to calling the end of the exemption "Trump's online shopping tax."
- "The end of the de minimis exemption will reduce affordability, it will hurt our small businesses and it will erode the certainty small businesses and families work everyday to build," Maryland state comptroller Brooke Lierman said on a press call Thursday.
For the record: A senior administration official said Thursday that foreign carriers would have to make business decisions about whether they wanted to comply with the new trade rules.
- A second official said that the carriers suspending service represented a small fraction of the total shipments to the U.S. and that there will not be negotiations on, or exemptions to, the new rules.
The bottom line: The trade war isn't over, its battle lines are just shifting.
