The U.S. Customs and Border Protection agency began collecting normal duty rates on all package shipments valued under $800, regardless of value, country of origin, or mode of transportation.
The change broadens the Trump administration’s cancellation of the de minimis exemption, already in place for packages from China and Hong Kong since May as part of an effort to halt shipments of fentanyl and its precursor chemicals into the U.S.
“For too long, this loophole handed criminal networks a free pass to flood America with fentanyl, fake goods, and illegal shipments. Those days are over.”
The de minimis exemption has been in place since 1938, starting at $5 for gift imports, and was raised from $200 to $800 in 2015 to foster small business growth on e-commerce marketplaces.
The National Coalition of Textile Organizations hailed a “historic win” for U.S. manufacturing following the closing of a loophole that allowed foreign fast-fashion firms to avoid tariffs and import apparel sometimes made with forced labor, undercutting American jobs.
More than 25 foreign postal services suspended mail to the U.S. in the run-up to the de minimis deadline, helping the U.S. to avoid a repeat of the chaotic package pile-up that forced the Trump administration to pull back on its first attempt at ending the de minimis exemption for China in February.
The customs agency said 95% of all de minimis shipments are handled by general cargo carriers or express shippers such as FedEx, UPS and DHL, which had already adapted to the China changes. Britain’s Royal Mail resumed shipments on Thursday.
Higher costs, more paperwork
It is also likely to curb trade on peer-to-peer platforms such as eBay and Etsy, which are used by small businesses to sell secondhand, vintage or handmade items.
Foreign postal agencies can opt to collect and process the duties based on the value of the package contents, or they can collect a flat tax calculated from the tariff rate in effect for the country of origin.
Based on the agency’s guidance issued on Thursday, parcels would be charged $80 from countries with Trump-imposed duty rates below 16%, such as Britain and the European Union; $160 from countries between 16% and 25%, such as Indonesia and Vietnam; and, $200 from countries above 25%, including Brazil, Canada, China and India - REUTERS
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