The United States on Friday ended duty-free exemptions for small packages valued at $800 or less, sparking concerns among small businesses and warnings of potential price increases for consumers.
The Trump administration cited the use of low-value shipments to evade tariffs and smuggle drugs as the reason for ending the exemption.
Under the new rules, parcels will be subject either to tariffs corresponding to their country of origin or a fixed duty ranging from $80 to $200 per item, though some personal items and gifts remain exempt. Trade adviser Peter Navarro said the change helps curb the flow of “narcotics and other prohibited items” while generating additional tariff revenue for the United States, according to news reports.
The announcement, which followed a month-long lead time, triggered disruption across international postal services. Countries including France, Germany, Italy, India, Australia, and Japan suspended most shipments to the US.
The Royal Mail introduced alternative services to allow continued shipments, while the Universal Postal Union reported that 25 member countries’ postal operators halted outbound services to the United States.
Small businesses relying on US customers have expressed concern over higher costs and shipping delays. UK retailer Liz Nieburg, owner of SocksFox, said she may have to raise prices for her products, which include socks and sleepwear, since US buyers account for about 20% of sales.
Similarly, Canadian entrepreneur Haley Massicotte warned that the tariff changes will hurt both small businesses and consumers, while companies like CoverSeal in California and Bangkok-based retailers face additional challenges in shipping costs.
Economists and trade experts have cautioned that the transition will be complex. Cornell University professor Li Chen noted that it will take time for postal services to implement duty collection systems, likely causing customs delays and possible price hikes as businesses pass on the added costs. While larger companies may absorb the impact, smaller businesses remain highly vulnerable to these new tariffs.
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