Kim Batten, a physical therapist from Oakland, Calif., bought a trench coat earlier this year from a Dutch retailer for $456, a price that was a little above her budget.
But after the coat was shipped, UPS told Ms. Batten in an email that she would have to pay over $250 in customs duties to receive it. With shipping, the whole transaction came to well over $700.
“It ended up being the second most expensive article of clothing I’ve ever bought, other than my wedding gown,” she said.
For decades, no customs duties were imposed on items like Ms. Batten’s coat. But this year, President Trump closed a loophole that had allowed goods worth $800 or less to enter the United States tariff free. The loophole, known as the de minimis exemption, ended for items from China in May and for the rest of the world in August. Shoppers must now pay duties for the first time, often in amounts far higher than they expected.
“I’m definitely more leery about where I’m shopping now,” Ms. Batten, 35, said.
Democrats and Republicans favored ending the exemption on low-value goods. They said it helped large sellers, particularly those from China, evade tariffs, and made it easier to smuggle fentanyl into the country. Other countries are now planning to end or tighten de minimis exemptions.
Still, the abruptness with which the United States closed the loophole caused major disruptions for sellers of all sizes, as well as for express carriers like FedEx and UPS, postal networks and American shoppers.
“It’s been a bit of a whiplash for sure,” said Clint Reid, chief executive of Zonos, which provides software that enables sellers to calculate and pay tariffs.
Before the policy changes, an average of around four million de minimis packages entered the United States a day. The number of packages worth $800 or less coming into the country is now much lower.
Since Aug. 29, when the loophole closed for all countries, Customs and Border Protection has cleared over 70 million shipments that would previously have qualified for the exemption, according to a spokesman for the agency, implying a daily average inflow of over 800,000 packages. The spokesman said the agency had “assessed over $400 million in duties” on the packages.
“Volumes of packages coming into the U.S. continue to increase as exporters adjust” to the new policies, the spokesman added.
Foreign sellers are responding to the new regime in different ways.
Instead of sending items individually from overseas, some foreign retailers have begun shipping their goods to the United States in bulk, paying tariffs at the border, and distributing them to consumers from American warehouses. And some foreign sellers who continue to sell directly to shoppers in the United States have also decided to pay tariffs themselves.
In both cases, the sellers may mark up prices to cover all or some of the duty, but American recipients would not have to make a customs payment to get the package.
But some sellers choose not to pay the tariffs themselves, and ask their customers to do so. That’s why shoppers need to scrutinize the checkout process and look at the fine print on sellers’ websites.
Some overseas retailers calculate the tariff amount at checkout, giving buyers an opportunity to decide whether they want to complete the purchase. Ssense, an online boutique based in Montreal, discloses tariffs amounts to customers in this way.
The big surprises occur when sellers don’t collect tariffs from buyers at the time of purchase — and don’t say how much consumers might have to pay later.
Ms. Batten bought her coat in July from Rain Couture, a retailer based in Amsterdam, whose website does not tell customers in the United States how much they will owe in duty. Rain Couture doesn’t even flag on its checkout page that duties may have to be paid. Instead, shoppers have to click through to other pages on Rain Couture’s website to read that duties are their responsibility. Rain Couture did not respond to requests for comment.
To receive her coat, which was made in China, Ms. Batten paid the duties to UPS. The tariff payment was equivalent to nearly 60 percent of the value of the coat. UPS didn’t respond when asked to detail how it arrived at the duty payment. Clothes made in China can be subject to several different tariffs, resulting in high duty payments.
Some sellers give clear warnings that duties might have to be paid but don’t state the amount.
This, too, can catch buyers unaware.
Claudia Scholtz, 78, an avid weaver from Portland, Ore., paid Jane Stafford Textiles, a Canadian seller, $158.36 for leg extensions, pieces of wood that raise a loom. Jane Stafford clearly warns American customers at checkout that they will likely have to pay tariffs to UPS later.
UPS notified Ms. Scholtz that she would have to pay $333.50 in duty to receive the parts. Ms. Scholtz, a former procurement manager, paid the tariff but asked UPS to assess whether it made a mistake, given that the duty is more than twice the amount of the item. Elizabeth Pataky, operations manager at Jane Stafford Textiles, said the extensions “originated in the Netherlands.”
A UPS spokeswoman said the tariff was calculated correctly “based on the information provided by the shipper.” She didn’t respond when asked to explain how UPS arrived at the tariff amount.
Ms. Scholtz looks after her husband, who has vascular dementia, and she said she finds weaving meditative. “It’s like my therapy,” she said. Asked how she’d approach online shopping now, Ms. Scholtz said, “I would be very careful not to choose a product that is not shipped within the U.S.”
Ms. Pataky said Jane Stafford Textiles expects to upgrade to a new software system in January that calculates, guarantees and collects duties at checkout. She said it would be “extremely difficult” for Jane Stafford, a small business, to absorb the cost of the tariffs.
Ms. Pataky said she believed that UPS very likely made a mistake when calculating such a high tariff rate for the leg extensions, adding, “We are often just as in the dark as our customers, and we spend significant administrative time helping them dispute or reverse unexpected charges.”
Packages can be sent to the United States not only by express carriers, but also by using the international postal network, in which, say, Canada Post transfers a package to the United States Postal Service.
Sellers using the postal network experienced the most disruption when the de minimis exemption ended. The U.S. Postal Service does not have the ability to collect customs duties on a large scale and foreign post offices suspended shipments to the United States.
But the situation improved after the United States allowed certain qualified companies to collect and pay customs duties on postal network shipments. Packages arriving by the post now must have duties paid before they enter the United States, which prevents unwelcome surprises for American shoppers.
Several foreign post offices, those in Britain, Canada and Ukraine included, now make it possible for senders to pay duties, but the flow of postal packages into the United States is well down, said Mr. Reid of Zonos, which is one of the qualified companies that collects and pays customs tariffs on postal shipments.
He said American shoppers are not used to making duty payments, which is why most foreign sellers appear to have chosen to just pay the duties themselves. But, Mr. Reid added, “Sellers are trying to bake it into the product price in some way.”
Peter Eavis reports on the business of moving stuff around the world.
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