The United States on Friday ended tariff exemptions for small packages entering the country from abroad, a move that has raised alarm among small businesses and prompted warnings of potential price increases for consumers. The Trump administration said the change targets the use of low-value shipments to evade tariffs and smuggle prohibited items, including narcotics.
Previously, parcels valued at $800 or less could enter the United States duty-free, but under the new rules, they will either be subject to the tariff rate applicable to their country of origin or a specific duty ranging from $80 to $200 per item. Certain exemptions remain in place for personal items and gifts, but the policy shift is already causing widespread disruption for international sellers and postal services.
President Donald Trump’s order, issued with a month-long lead time, has created a scramble among postal operators and e-commerce businesses. Postal services in countries including France, Germany, Italy, India, Australia, and Japan had announced that most US-bound packages would no longer be accepted ahead of the implementation deadline. The UK’s Royal Mail, which had temporarily halted shipments, introduced new services on Thursday to help customers continue sending goods to the United States.
Trump’s trade adviser, Peter Navarro, defended the move, saying closing the “loophole” would curb the flow of narcotics and other prohibited items while generating additional tariff revenue. “Foreign post offices need to get their act together when it comes to monitoring and policing the use of international mail for smuggling and tariff evasion purposes,” Navarro said.
US officials have noted that only five percent of duty-free small package shipments enter via the postal network, with the majority moving through express couriers. Nonetheless, the policy change has caused confusion and anxiety for small businesses reliant on US customers.
United States Ends Duty-Free Exemption for Small International Packages, Sparking Concerns for Small Businesses
Liz Nieburg, a UK retailer, said she has temporarily stopped shipping products to the United States while the Royal Mail adapts to the new rules. Her online store, SocksFox, sells socks, undergarments, and sleepwear, with US buyers accounting for roughly 20 percent of sales. “Our margins are too tight to be able to absorb that,” she told AFP, noting that she may have no choice but to raise prices if duties remain in place.
This is part of a broader trend in the Trump administration’s trade policies, which have seen tariffs imposed in rapid succession this year. Experts warn that implementation is complex and could take time to stabilize. Cornell University professor Li Chen explained that postal services require time to establish systems for duty collection. “It’s not like there’s a switch you can turn on and turn off,” Chen said, adding that consumers may experience delays as parcels are processed through customs, and prices may rise if businesses pass tariffs on to buyers.
Small businesses are likely to bear the brunt of the impact, he added, while larger firms may be better positioned to absorb costs. This was evident in the case of China-based consumer platforms Shein and Temu, which faced challenges when the US ended duty exemptions for China-origin products earlier this year. While these larger companies can adjust prices and logistics strategies, smaller businesses are more vulnerable.
Ken Huening, who runs CoverSeal, a California-based manufacturer of outdoor protective covers sourced from China and Mexico, has had to eliminate free shipping for customers. “Textile and manufacturing are not available in the US currently,” he said, stressing that any further delays or tariffs could jeopardize his business.
Haley Massicotte, founder of Oak & Willow, a Canada-based cleaning products company, said US consumers often do not understand how tariffs work or that they may bear additional costs. “We are going to do everything in our power not to raise prices,” she said, noting the logistical confusion caused by the sudden policy shift.
Similarly, Sarah Louise Jour, a ceramics retailer in Bangkok, is struggling to keep shipping costs down after Thailand’s postal service encountered delays. She has had to rely on more expensive courier services for US-bound shipments, which make up 90 percent of her sales. “I don’t have time to worry, because I have to think about my team. We have rent to pay for the office,” Jour said, adding that while holiday sales may hold up, the post-holiday outlook is uncertain.
The end of the tariff exemption has left many small businesses bracing for higher operational costs and the potential need to pass these on to customers. Massicotte warned that the ongoing tariff disputes and policy changes will ultimately hurt consumers in both the United States and Canada, particularly small business owners who rely on cross-border e-commerce.
As the new regulations take effect, the trade landscape for small international shipments has shifted dramatically, leaving companies scrambling to adapt and consumers facing the prospect of increased prices for everyday imports.
Source- Punchng
