The internet can make finding something you’re looking to buy easy, with access to a whole world of stores.
But as of last week, depending on where you’re trying to buy it from, it may cost you a lot more. Or you may not be able to get it at all.
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The abrupt move has couriers, customs brokers, businesses and countries scrambling to figure out how to apply the customs duties to those shipments.
In some cases, it may mean businesses will have to raise prices to absorb those costs.
In some cases, customers may find they have to pay a bill to get their package.
And in some cases, customers may not be able to buy from certain countries at all, at least temporarily.
Here is what customers and businesses need to know.
What is the de minimis exemption?
The United States has had some form of “de minimis” exemption since the 1930s. The term is Latin for something of little importance.
The exemption allows low-value packages to enter the country without a tariff or duty.
In 2016, the threshold was raised from $200 to $800. It meant the U.S. had one of the highest duty-free thresholds in the world.
Why did it go away?
However, the move also allowed international direct-to-consumer platforms like Temu to thrive.
The Biden administration began to put regulations on certain goods to reduce shipments. Earlier this year, Congress passed a bill to end the de minimis exemption in 2027.
However, President Trump signed an executive order to end de minimis exemptions on all products from China in May, and then signed a second order to end the exemption for all countries on Aug. 29.
The Trump administration said the exemption allowed unsafe products to enter the country. The president also said the exemption made it easier for shipments of illegal goods like fentanyl to enter the country.
[READ: White House Fact Sheet on ending the de minimis exemption]
Which countries are suspending or limiting shipments?
The postal services and shipping companies for more than 30 countries are limiting or outright suspending shipments to the United States for the time being, while they figure out how to handle the customs for these packages.
Now this could mean the package is coming from those countries, but it could also mean the package is coming through that country on its way to the U.S., according to the Universal Postal Union, a UN agency that helps coordinate the global postal system.
The agency tells News 6 it has received 38 official suspension of service notifications as of Sept. 1, but it believes the scale of the suspension is much larger.
Countries that have suspended shipments meant for the U.S. include:
- Australia
- Austria
- Belgium
- Bulgaria
- Cyprus
- Czechia
- Denmark
- Estonia
- France
- Germany
- Greece
- India
- Italy
- Japan
- Latvia
- Liechtenstein
- Lithuania
- Malta
- Mexico
- Moldova
- Montenegro
- Norway
- Poland
- Portugal
- Serbia
- Singapore
- Slovenia
- South Korea
- Spain
- Sweden
- Switzerland
- Taiwan
- Thailand
- United Kingdom
The UPU says data shows an 81% decrease in postal traffic to the U.S. on Friday, Aug. 29, compared to the previous week.
How much will it cost to get an international package now?
It depends.
Packages that are valued at $100 or less and are considered gifts will remain duty-free.
For anything worth more than that, the White House lists two price structures in its Fact Sheet:
- Ad valorem duty: "A duty equal to the effective tariff rate imposed under the International Emergency Economic Powers Act." This can range from 10% to 50%, depending on the country of origin, and will be based on the purchase cost.
- Specific duty: “A duty ranging from $80 per item to $200 per item, depending on the effective IEEPA tariff rate applicable to the country of origin of the product. The specific duty methodology will be available for six months, after which all applicable shipments must comply with the ad valorem duty methodology.”
Those packages will also be inspected more thoroughly.
How is the customs duty paid?
This is all still being worked out. In fact, some countries have suspended package shipments to the United States while they try to put systems in place to handle those packages smoothly.
There are two ways the duties are handled, according to Marianne Rowden, CEO of the E-Merchants Trade Council, Inc.: Delivery Duty Paid and Delivery Duty Unpaid.
“If a company ships goods to a customer using Incoterms Delivery Duty Paid (DDP), it means that the seller arranges and bears the cost of transportation, insurance, and customs clearance as well as the risk of loss,” Rowden said.
Rowden says the business would work with a licensed customs broker to get customs paid. There are also a lot of unknowns that can create costs that eat into a company’s profits on an international sale.
For smaller businesses and people selling on marketplaces like Etsy, popular carriers like UPS, FedEx and DHL can be DDP carriers, but it depends on whether the carrier operates in the business’ home country. Etsy put a list of commonly-used DDP carriers on its website.
In the case of Delivery Duty Unpaid, that means the business will ship the package, and any duties will fall to the customer. That means you could get a bill with your package.
“If the customer is using an express air courier (DHL, FedEx, and UPS), all the transportation and customs clearance processes are integrated so the customer will receive one bill with all the costs of transportation, insurance, customs duties, taxes, and fees,” Rowden said.
If you’re ordering something through another shipping service, Rowden says the bill will come from a licensed customs broker. A list of approved brokers is on the U.S. Customs and Border Protection website.
“The customer needs to engage a licensed customs broker (LCB) who will receive the commercial invoice and transportation documents for shipment in order to determine the tariff classification and duty rate applicable to the goods, and the LCB will notify the customer how much the duties, taxes and fees will be for clearance of the goods,” Rowden said. “Depending on the customer’s relationship with the LCB, the LCB may ‘front’ the customs duties, taxes, and fees when filing the customs entry to clear the goods. Otherwise, the LCB will provide the customer with the estimate and the customer will need to pay the LCB all the customs duties, taxes and fees before the LCB files the entry for clearing the goods.”
How do I find out how much the customs bill will be?
“It depends on how a customer orders a product,” Rowden said. “If the customer is a business ordering a product from another business, then the manufacturer or seller will advise the customer about the transportation costs and duties so that they can negotiate which Incoterms to use.
“If the customer is an individual ordering goods off a marketplace platform, the marketplace will typically list the cost of the shipping option and may have a customs duty calculator on the site,” Rowden added. “If an individual is ordering goods directly from a company’s website, the company should disclose its shipping and customs duties policies in the Terms and Conditions section of the website.”
Marketplaces like eBay and Etsy have provided guidance on shipping, paying the fees and pricing products to help absorb the costs of shipping to the U.S.
EBay also has a guide for customers on what they can expect on its website.
Also, if the customer is the one paying the duties, the business or the carrier is supposed to notify them.
And of course, the cost is going to depend on the product as well.
Who will be impacted by this the most?
Rowden says small to medium-sized businesses that sell products either on their own website or through a marketplace like Etsy will likely be most affected, and not just international retailers but American businesses that sell foreign goods.
“They probably do not have in-house logistics and trade compliance professionals to assist with cross-border shipment and customs clearance of goods,” Rowden said. “SMEs who sell goods that are manufactured in China are particularly affected because the tariffs are 55% ad valorem. SMEs are price sensitive, so any increase in tariffs and shipping costs will cut into their profit margin. Additionally, these SMEs do not have the shipping volume to obtain the best shipping rates from transportation carriers.”
Rowden said businesses with questions can reach out to the E-Merchants Trade Council at info@emtc.org.
Could people exporting to other countries soon see the same issues?
“Yes, American businesses that export goods to foreign countries are subject to similar shipping and customs clearance processes and costs,” Rowden said. “Other countries are reviewing their de minimis levels and so duty-free entry of low-value U.S. goods may end similar imports to the U.S.
“For example, she explained. ”EU Member States have 150 euro de minimis whereby American companies can ship goods valued up to 150 euros duty-free until 2027 when the de minimis is eliminated."