How will American shoppers get hit when tariff exemptions end

The United States has plugged a long-running global tariff exemption into the plug, which has been widely used by buyers of low-cost goods.

Imports worth $800 (£592) will no longer be liable from Friday and will face stricter customs inspections, a move that affects millions of goods every day.

According to U.S. Customs, nearly 1.4 billion packages (total value over $64 billion) entered the U.S. last year without the responsibility under a rule called “the minimum restriction exemption.”

Experts say policy changes by U.S. President Donald Trump will have the biggest impact on small businesses, and shoppers should be prepared for higher prices and fewer options – at least until the dust settles.

“I’ve achieved my acceptance, but when I first heard about news about two and a half weeks ago, I felt that this might be the end of my business,” said Katherine Theobalds, founder and creative director of Buenos Aires-based footwear brand Zou Xou Xou Xou Xou. “It’s still possible – and remains to be seen.”

de minimis is a Latin term that translates widely into “about the smallest” and is often used in a legal context to describe things too trivial to be worthy of attention.

The De Minimis exemption was introduced in 1938 to avoid the charge of small import taxes in the United States.

Over the years, the threshold for the rule has risen, allowing e-commerce companies and global retailers to deliver small packages to the United States to flourish.

The exemption is often associated with companies like Chinese e-commerce giants Shein and Temu, which deliver cheap American goods that can be shipped out of manufacturing sources very quickly – no warehouse stocks or associated additional fees.

But while Shein and Temu helped pioneer this way of working, many other businesses – foreign and domestic, large and small – have in turn incorporated “voids” into their supply chains and sales models.

Tapestry executives – parent company of American fashion brand coaches, known for leather bags sold from $200 to $1,000. Analysts this month expect their profits to suffer $160 million in losses due to changes in tariff policies, due to the elimination of about one-third of the minimum dominance.

In recent years, coaches have expanded rapidly in a comeback campaign driven by Gen Z shoppers, and tapestries are still confident that this momentum will offset some of the effects of tariffs. Nevertheless, eliminating minimum is a logistical challenge.

The goods exempted account for more than 90% of all goods entering the country, According to our customs.

The president and his predecessor, Joe Biden, criticized the policy for being harmful to U.S. businesses and said it had abused smuggling illegal goods, including drugs such as fentanyl.

Trump’s trade adviser Peter Navarro said in a phone call with reporters on Thursday that the move would “save thousands of lives in the United States through mail restriction on the flow of narcotics” and add $1 billion to the U.S. vault every year.

trump card Quickly track the repeal of this rule through executive order This year, it is far beyond the planned 2027 expiration date.

With the necessary documents, the shipper will pay responsibilities based on the tariff rate of the country of origin. Otherwise, they can choose between $80 and $200 per set. White House.

The second option is designed to provide more time for the postal service to adapt to the time of change and can only be used for six months.

Mainland China and Hong Kong were the first to be laid off in May, prompting E-commerce giant Temu stops direct sales Go to the United States.

Letters and personal gifts worth less than $100 are still not responsible.

Trade experts told the BBC that American consumers may see a wide variety of merchandise on stores and e-commerce platforms.

Tam Nguyen of logistics management company GOL Solutions said smaller companies need time to adjust because they mainly have gone from such paperwork until now. The company handles exports from Southeast Asia to the United States.

“You need to point out the source of all the materials in the product, which may come from many countries with different tax rates. This will definitely make the goods slower.”

She added that complexity could prevent sellers from offering a wider range of export products.

This may have a special impact on more niches.

Christopher Lundell, a 53-year-old psychologist based in Portland, Oregon, also uses music as a hobby. He is an avid vinyl record collector who recently realized the De Minimis waiver suspension when he tried to buy a rare record of $5 from a seller in the UK.

“He canceled my order and said, ‘I’m sorry, but the UK will no longer ship to the United States.'”

Mr. Lundell said he tried his best to find record sellers in the United States before finding overseas sellers in countries such as the United Kingdom, Japan and China. He added that he understands the need to protect his business in the U.S., but said he believes the blanket that avoids the minimum exemption is a “political theater.”

Some orders may also freeze in the next few weeks. Ms Nguyen said some customers, including those in the healthcare sector, have stopped orders.

Major postal services in the UK, Europe and Asia-Pacific region suspended delivery to the United States this week.

Operators blame the uncertainty of how tariffs work and lack of preparation time.

Without exemptions, businesses will have to consider the tariffs imposed by the United States on the country of origin, which Most countries are in effect In August.

For countries like the UK and Australia, these taxes could be as low as 10%, while goods from Brazil and India face 50% tariffs.

After the change, specific duties will be imposed against countries with tariffs of 16% or less, from national freight with tariffs of 16% or no more than 16% or 25% or from goods from countries with tariffs of 200 USD.

A senior administration official downplayed consumer concerns, saying the move would “benefit “Americans” by making them “safeteria” and “prosper.”

Some American companies welcomed the news, believing that the knockout stage will be upgraded to the sports field.

“Gap Inc. welcomes the government’s decision to suspend the global tax-free De Minimis treatment. The De Minimis vulnerability has long provided some importers and retailers with the opportunity to avoid paying a fair share of U.S. responsibilities,” the company said in a statement.

Small companies, especially, feel the pressure from the expensive audits needed to clear American customs, which makes it difficult for sellers to keep prices stable, said Deborah Elms, a trade expert.

Elms of research firm Hinrich Foundation said that as many postal services delay U.S. shipments, sellers may have to pay more expensive couriers to reach U.S. buyers.

British retailer Wool Warehouse is a company that stops orders from the United States.

Managing Director Andrew Smith said there is “a lot of uncertainty right now” because businesses have to figure out the shipping process and the fees involved.

He said his company hopes to resume orders to the U.S. in two weeks – the largest export market, adding that it will take time to wait for other companies to react to the changes.

Mr Smith said the prices of its merchandise — mostly wool and fabricated materials purchased worldwide — could rise as much as 50%.

He said the company also plans to improve its website to indicate the fees charged for each product’s tariff rate.

“Our goal is full transparency so people know that this will determine how much it will cost and then they can decide whether to make a purchase.”

Theobalds MS specializes in women’s shoes made by craftsmen in small Argentina workshops on Zou Xou, priced between $200-300. She began her career in New York and focused her business on American clients.

She has long run a two-tier system – customers either receive shoes from U.S. warehouses, where she keeps some inventory or ships directly from Argentina via DHL.

She said customs fees have been paid to large shoes in the United States, but a pair of two were sent from Buenos Aires from Buenos Aires to customers due to the minimum exemption.

Now she is not sure how to think about increasing costs and is exploring several options and hopes to gain clearer clarity on how to change her business model.

It’s also important, she said, how businesses like her explain changes to consumers.

She fears that even if the price hasn’t changed much, the responsibilities that seem too complicated may be shut down even if anyone who wants a high-end product can.

“Our customers are around us because they appreciate the quality of handmade quality. They may always go to mass retailers,” she said. “But what people have to consider is, ‘It’s important to me, or do I just want a pair of shoes?”

Ms. Elles said U.S. retailers will earn if prices of goods ordered from abroad rise.

“If it’s too expensive, they might go to Walmart or Target to buy it there,” she said.

But with so many goods being sent from around the world now and customs are now being fulfilled, American consumers may once again seek cheaper options from China.

Ms Nguyen said Chinese companies like Shein and Temu have set up distribution centers in the United States, which will help reduce some of the tariff costs.

She added that China is figuring out the “next months” of paperwork compared to companies other countries are striving for rapid growth.

Ms Nguyen said it has made it more difficult for small businesses to launch e-commerce websites due to the end of the De Minimis waiver.

“It used to be: Set up a website, list the products and start shipping. But now the low-cost entry point is gone.”

Other reports by Nadine Yousif and Bernd Debusmann Jr