Read the latest small business news written by me at my home business newsdesk. Get my updates sent to you via email by signing up on this page.
I’m Dan, a freelance small business journalist and event/podcast host with 20+ years of experience. If you’re looking for small business-focused content or an engaging event host, I’d love to help. Get in touch.
The almost century old law that allowed businesses in countries around the world to ship low value goods to the US without paying duties and tariffs has ended today.
The de minimis threshold, which meant shipments under $800 (£592) were not subject to duties, was introduced in 1938 (when it applied to goods under $1), but it has been scrapped by US president Donald Trump. The change is part of his new controversial tariffs on countries around the world through the International Emergency Economic Powers Act (IEEPA).
The ending of de minimis was first announced in April this year for imports from China, but an executive order in July extended it to all countries, and that change has come into force today, 29 August.
A White House factsheet outlining the changes said the US government is “closing the catastrophic loophole used to, among other things, evade tariffs and funnel deadly synthetic opioids as well as other unsafe or below-market products that harm American workers and businesses into the United States”.
Between 2015 and 2024, the White House said the volume of de minimis shipments entering the US increased from 134 million to over 1.36 billion.
The change will have a significant impact on UK small businesses exporting low-value goods to the US, with extra costs, admin and red tape. It could also impact sales in the US, given American customers buying from UK businesses now face extra charges.
I’ve posted a summary of the main changes below, but for detailed guidance on what the scrapping of de minimis means for your business, watch this brilliant video from Global Trade Department:
The charges that now apply
For goods delivered via the international postal system (Royal Mail, Parcelforce etc), duties are calculated under one of the following rules:
- Ad valorem duty: This is a duty equal to the IEEPA tariff rate applicable to the country of origin of the product. For products of UK origin, it’s 10%.
- Specific duty: A set amount depending on the IEEPA tariff rate applicable to the country of origin of the product. The rates are $80 for IEEPA tariffs below 16%, $160 for IEEPA tariffs between 16% and 25%, and $200 for IEEPA rates above 25%.
The specific duty is a temporary measure designed to allow time for the international postal network to adapt to the changes. It applies until the end of January 2026, after which the ad valorem methodology must be followed for all imports into the US.
Royal Mail has launched a new service for UK low-value exports to the US using the ad valorem duty calculation. See the shipping and postal services section below for more details.
If a business is shipping products from the UK but they have been made in another country, the tariff applicable to that country will apply. So for example, if you are sending products made in India, it’s the much higher tariff of 50%.
Other charges include merchant processing fees and a 0.125% harbor maintenance fee (HMF) for shipments by sea.
For goods shipped via fast parcel operators (UPS, DHL, FedEx etc), both the most-favored-nation tariff (MFN) and IEEPA tariff rate applicable to the country of origin of the product applies.
The most-favored-nation (MFN) tariff is the standard tariff that applied to goods before the new IEEPA tariffs were introduced.
How small businesses can manage the charges for customers
There are two ways you can collect the duties:
Delivered At Place (DAP): Customers must pay the duties and taxes when the product is delivered to them. This reduces your admin but could be an unwelcome surprise for customers.
Delivered Duty Paid (DDP): Import duties and taxes are calculated when the customer is purchasing the product and they pay them at checkout.
You could absorb all the charges yourself, but that might mean you have to put up your prices which could negatively impact your sales.
What it means for shipping and postal services
At the time of writing, several postal services around the world have paused some deliveries to the US due to confusion around the new rules. Online marketplaces have also taken similar steps, such as Etsy which from 25 August suspended postage label purchases for Australia Post, Canada Post, Evri and Royal Mail for US bound packages.
Many international shipping operators are using the specific duty methodology.
Royal Mail initially suspended deliveries to the US, but it has now announced a new postal delivered duties paid (PDDP) service for goods shipped to the US which uses the ad valorem duty methodology.
Royal Mail explains the service as follows:
“The service allows the UK merchant to calculate and collect from their customer at the checkout an additional amount that will cover the cost of import VAT and customs duty alongside the PDDP handling fee. Royal Mail convey the items to the overseas delivery partner. Upon arrival overseas any VAT and duties are calculated by the overseas authority and then billed to Royal Mail. Royal Mail then pass these on to the sender, including a 50p handling fee per item.”
Useful links
White House executive order scrapping de minimis
Updates on US tariffs from DHL, FedEx, UPS, eBay, Etsy, Folksy
I’m Dan, a freelance small business journalist and event host with 20+ years of experience. If you’re looking for small business-focused content or an engaging event host, I’d love to help. Get in touch.
Dan Martin 