• The U.S. has permanently ended the de minimis exemption for packages valued under $800, effective immediately.
• All parcel imports will now face additional duties, affecting e-commerce businesses and consumers alike.
• Shipping firms can choose a flat-rate duty of $80 to $200 per package for the next six months.
• The change is anticipated to generate $10 billion in tariff revenue and reduce the flow of illegal items.
• Higher costs may significantly impact online shopping prices, creating parity with bulk retailers.

The U.S. has officially ended its tariff exemption for package shipments valued under $800, a move that came into effect at 12:01 a.m. EDT on Friday. This significant policy change by the Trump administration is aimed at curbing the influx of narcotics and other illicit goods while generating substantial revenue through tariffs, estimated at up to $10 billion annually, according to White House trade adviser Peter Navarro. The U.S. Customs and Border Protection (CBP) agency will now enforce normal duty rates on all global parcel imports, irrespective of their value or origin, shifting toward a system where shippers may face duties ranging from $80 to $200 for packages during a six-month transition period, as stated by Reuters, Channel News Asia, and Dawn.

The de minimis exemption, which has existed since 1938, was initially set to facilitate trade by allowing low-cost goods to enter the U.S. without duties. However, it was raised from $200 to $800 in 2015, leading to a dramatic increase in direct shipments from countries like China after tariffs were imposed on Chinese goods by President Trump. This surge has been linked to a significant rise in illicit items entering the country, as noted by Reuters and ABC News.

Experts have criticized the ending of the de minimis exemption as a measure that may lead to increased prices for consumers and disrupt established supply chains for many e-commerce companies and small businesses reliant on importing low-value goods. Retail analysts predict that the changes will have broad implications, putting smaller e-commerce firms in competition with larger retailers like Walmart, which import goods in bulk, thereby lessening the cost burden of tariffs. The National Coalition of Textile Organizations praised the move as a necessary step to protect U.S. manufacturing from foreign competition that undercuts prices through tariff evasion, according to Reuters and Reuters.

Overall, the end of the de minimis exemption marks a significant policy shift that could reshape how international shipping is conducted, requiring adjustments from both consumers and businesses alike as they navigate the complexities of new tariff requirements and additional costs, as discussed by HuffPost and Reuters.