The deadline for a tax exemption on low-value imports to the US is approaching, set to expire this Friday.
Recently, President Trump issued an enforcement order to pause the “de minimis” tax-free provisions for goods valued under $800.
This executive action has led many national postal services from various countries to stop sending some or most packages to the US. The disruptions relate to added charges and complications in processing orders.
Retail giants like Shane, Amazon, and Tem could see significant impacts from the end of this exemption.
Between 2015 and 2024, there was a massive increase in shipments coming into the US, jumping from 134 million to more than 1.36 billion, as noted by the White House. As of late July, US customs and border protection reported processing over 4 million shipments daily, reflecting the sheer volume of low-value imports.
The White House claims that this exemption is often exploited, with illegal fentanyl and other synthetic opioids making their way into the country via minimal shipping methods, which has resulted in fatalities in the US.
After the deadline, Americans will still be able to claim up to $200 on personal items and receive gifts that fall under the tax-free limit.
This import duty exemption was established in 1938 under section 321 of the Customs Act, aimed at facilitating shipments of low-value items without incurring import taxes.
Over the years, the exemption has been revised multiple times, eventually extending to items valued under $800.
The situation garners support on both sides, with lawmakers and executive officials arguing this will hinder foreign manufacturers from undermining American businesses. Additionally, it is seen as a measure to enforce US trade laws and curb the influx of dangerous substances.
Earlier in May, Trump halted exemptions for packages coming from Hong Kong and China.
As the deadline draws near, international shippers are already reacting. DHL, the largest shipping courier in Europe, announced it has ceased shipping business packages to the US.
They highlighted that several key questions remain unanswered, particularly around future tariff collection and necessary data submissions to US Customs and Border Protection, as stated last week.
Some European nations, including Sweden, Italy, and Denmark, have also stopped shipping various packages to the US. Starting Monday, shipments to the US will be suspended, with the exception of letters and small gifts under $100.
