The US has suspended tariff exemptions for small delivery packages valued at $800 or less, ending a loophole that allowed more than one billion packages to enter the US last year without customs duties.
The loophole is due to end on Friday in the US, followed by a six-month transition period to a new tariff regime.
More than 30 countries, including Australia, Germany, Japan and Mexico, have suspended or partially suspended package shipments to the US in advance of the cost change.
Postal unions around the world say more clarity is needed about how the tariff will be calculated before they resume shipments to the US.
Global logistics giant DHL said it would not ship standard business parcels to the US until “unresolved” questions are answered regarding “how and by whom customs duties will be collected in the future”, and “how the data transmission to the US Customs and Border Protection will be carried out”.
A White House fact sheet released on July 30 stated that tariff rates on small packages will be calculated in one of two ways starting August 29.
The first option sets a flat rate of $80 to $200 per item, depending on the country of origin. The second option is based on the value of the package and the “reciprocal” tariff rate set by the White House for individual countries.
The flat rate will only be available for the next six months, after which all small packages will be subject to a tariff of 10 to 40 percent for most countries.
The White House set its “reciprocal” tariff rates in July for most trade partners, although negotiations are ongoing with key trade partners Mexico and China.
The administration of President Donald Trump says that tariffs are necessary to lower the US trade deficit, while ending the “de minimis exemption” – which lets people off on paying import tax on small items – will help slow the movement of narcotics posted across borders.
The de minimis exemption has been in place since the 1930s, but it played a critical role in the US economy after it was raised from $200 to $800 in 2015. The exemption on import tax on items valued less than $800 helped pave the way for international e-commerce by letting retailers ship directly to the customer.
Over the past decade, the number of packages crossing the US border each year rose tenfold from 129 million to 1.36 billion, according to US customs data.
The exemption also previously allowed Chinese e-commerce giants like Shein and Temu to avoid paying tariffs set on Chinese goods during Trump’s first term in office.
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