The change has caused widespread uncertainty over how the levies will be collected. President Donald Trump’s July 30 executive order states that transportation carriers have to collect the tax from merchants before arriving in the U.S. using a third-party service preapproved by U.S. Customs and Border Protection. As of midday Friday, only a dozen service providers had been certified to collect and pay such duties.
More than two-dozen countries - including several European nations, Japan and Taiwan ― have suspended some shipments to the U.S. until they sort out a system to collect the duties. That’s prompted some overseas businesses to cancel or hold deliveries until mail carriers conform to the new guidelines. Sabo, an Australian fashion brand, is advising customers that orders will be delayed another five to 10 business days, and that prices will include duties, tariffs and taxes to ensure there are “no surprise fees.”
Online marketplaces like Shopify and Etsy, which primarily house small businesses and independent vendors, have issued guidance for shoppers and sellers on how to adapt to the changes.
In the meantime, consumers shouldn’t expect to get overnight, two-day, or even five-business-day shipping, said Maria Pechurina, the director of international trade at Peacock Tariff Consulting.
Paul Robertson, the owner of niche book and art dealing company Unoriginal Sin, in the northern England region of Cumbria, said he’s unable to ship a $1,000 poster to an American client. “All the online options to get a courier or the Royal Mail are just stopping at the point where you put it in your basket … it just times out,” he said.
Though frustrated by the delay, the customer agreed to wait until service resumes. But Robertson lost another sale: He had to issue a $100 refund to an American museum for a pop-art catalogue from the 1960s.
Joan Strickler, an avid knitter from Edina, Minnesota, said she hasn’t been able to order wool yarn from her favorite sellers in Britain. That means she’ll miss out on a new collection of yarn colors out Monday.
“I feel like it’s all chaos for no reason,” she said. “It also affects small businesses here because a lot of yarn stores buy wool from outside the U.S.”
The U.S. dropped de minimis - Latin for too small or insignificant to be considered - on goods out of mainland China and Hong Kong in May, a move that largely targeted large e-commerce sites such as Shein and Temu. Both platforms thrived as a result of de minimis, allowing them to avoid paying billions of dollars in duties. But many small U.S. businesses also source materials from China.
Of the some 1.4 billion packages that entered the United States last year under the exemption, China represented about 75 percent, said John Lash, a vice president of product strategy at supply chain platform e2open. The Trump administration contends that closing the loophole on all imports will keep illicit drugs, such as fentanyl, from being mailed into the U.S. undetected.
In a media call Thursday, White House trade adviser Peter Navarro said ending the de minimis loophole will “add $10 billion a year in tariff revenues to our treasury, create thousands of jobs and defend against billions of dollars more lost to counterfeiting, piracy and intellectual property theft.”
But industry experts said American consumers will ultimately foot the bill, as businesses, as well as independent sellers on platforms like Etsy and eBay, increase prices to make up for the tax. Some buyers might see it as an additional shipping fee at checkout, said Alison Layfield, the vice president of product development for ePost Global, a domestic and international shipping solutions provider.
“There is definitely going to have to be some type of cost increase - I don’t think the merchants are prepared to just eat that additional cost,” she said.
