Changes to Tax-Free Allowance for US Packages from Europe
As of today, the long-standing tax-free allowance for parcels sent from Europe to the US, specifically those valued under $800, has come to an end. The only exceptions now are for small letters, documents, and gifts valued at less than $100.
This shift means that packages sent from Europe are now subject to taxes based on their value, affecting many individuals in the US receiving items through postal services.
Despite the introduction of these taxes by the Washington state government, parcel services to the United States remain operational.
What’s Changed?
About three weeks ago, post offices worldwide were notified by the US administration that taxes must be paid prior to any parcel being delivered to the US. Currently, items shipped from Ireland above the €85 threshold will face a 15% tariff.
For instance, if you’re sending a gift, like a nice sweater, from Ireland to someone in the US and it costs €100, you’ll be hit with that additional fee. This also applies to businesses; any product priced over €85 purchased from Ireland for delivery to the US will incur this extra charge.
This is a significant issue, considering more than a million parcels are sent from Ireland to the US annually. While postal services in some countries have paused deliveries until the details are clearer, regular mail continues as usual.
How Does the System Work?
From what I’ve gathered, especially after my experiences with Brexit and EU customs, the increased administrative burden primarily stems from these changes. The postal company claims it can adapt to the new tariffs relatively quickly, as it already has much of the necessary infrastructure in place.
As Garrett Bridgeman, the managing director of mail, noted, “The real issue is our business customers in Ireland who sell online to the US, as all their products now fall under these new tariffs.”
When a US customer orders from an Irish business, they will be notified that payment is required for customs fees. The post will collect these fees before sending the items further. US recipients of packages worth €85 can expect up to three reminders about customs duties within five days. Failing to pay these fees means the item stays in Ireland, ultimately returned to the sender.
Who Will Be Affected?
Garrett Bridgeman emphasized that 99% of deliveries to the US remain under the €85 limit, so are not subject to additional tariffs. However, online businesses often sell items that exceed this amount, making delivery essential.
Take the Bohemian Football Club in Dublin, for example. Their revenue significantly relies on jersey sales, particularly in the US, which is among their top markets. Due to the new tariffs, they have halted all US orders until they better understand the implications. Daniel Lambert, the club’s COO, mentioned that this could represent about 15% of their yearly turnover and added that they hope to find clearer guidance moving forward.
He pointed out that most packages are lower in value, like a soccer shirt, but the complexity of customs rules could disrupt the entire logistics process.
Other Countries’ Responses
This situation has rapidly escalated into a global issue, with postal services in Germany, Switzerland, Belgium, Austria, and Denmark ceasing deliveries to the US as well. Countries in Asia, including Japan and South Korea, have similarly stopped delivering parcels to the US.
Private companies like FedEx and UPS continue to offer shipping services, but recipients in the US still need to pay tariffs. Many of those suspending services assure that it’s not a permanent measure while they work on navigating this new administrative challenge. There’s a hope among some that there might be a policy rethink from Washington.
Why Has the US Ended the Tax Exemption for EU Packages?
While a specific rationale hasn’t been explicitly stated, it appears to align with President Trump’s “America First” policy, prioritizing American businesses. There’s speculation that this could also be a move to limit the influx of Chinese products entering the US via Europe.
However, in the short run, these changes will likely impact many Irish individuals who have family or connections in the United States.
