US ends ‘de minimis’ tariff exemption on small-value shipments

ISTANBUL

The US on Friday ended the “de minimis” tariff exemption for packages valued at $800 or less, closing a major loophole and disrupting international shipping.

The change means most commercial parcels will now be subject to tariffs, prompting widespread suspensions worldwide. Letters, documents and gifts valued at under $100 between private individuals will remain exempt.

According to the White House, starting Aug. 29, tariffs on small packages will be calculated either by a flat rate of $80 to $200 per item, depending on the country of origin, or based on the package’s value and a reciprocal tariff rate set by the US.

The flat rate will apply only for six months, after which most small packages will face tariffs of 10 to 40 percent. Reciprocal rates have been set for most trade partners, with talks ongoing with others.

The exemption, dating back to the 1930s and increased to $800 in 2015, was key to the growth of international e-commerce by allowing tax-free direct shipments of low-value goods to US customers.

Following the exemption’s removal, over 30 countries, including the UK, France, Germany, Austria, Sweden, Italy, Spain, the Netherlands, Mexico, Japan, South Korea, New Zealand, Singapore, and Australia, have suspended parcel shipments to the US.