The United States on Friday ended tariff exemptions on small packages entering the country from abroad, in a move that has sparked concern among small businesses and warnings of consumer price hikes.
President Donald Trump’s administration cited the use of low-value shipments to evade tariffs and smuggle drugs in ending duty-free treatment for parcels valued at or under $800.
Instead, packages will either be subject to the tariff level applicable to their country of origin or face a specific duty ranging from $80 to $200 per item. But exclusions for some personal items and gifts remain.
Trump’s trade adviser, Peter Navarro, told reporters that closing this “loophole” helps restrict the flow of “narcotics and other dangerous and prohibited items” while bringing fresh tariff revenues.
But the monthlong lead time Trump’s order provided has sparked a frenzy.
Postal services, including in France, Germany, Italy, India, Australia and Japan, earlier said most US-bound packages would no longer be accepted.
The UK’s Royal Mail, which took a similar step, announced new services on Thursday for customers to continue sending goods to the United States.
On Tuesday, the United Nations’ Universal Postal Union said 25 member countries’ postal operators had suspended outbound postal services to the country.
“Foreign post offices need to get their act together when it comes to monitoring and policing the use of international mail for smuggling and tariff evasion purposes,” Navarro added Thursday.
US officials maintain that just five per cent of duty-free small package shipments arrived via the postal network, while most went through express couriers.
Yet, the impending change has brought confusion and concern to small businesses.
UK retailer Liz Nieburg told AFP she had stopped shipping products to US customers while the Royal Mail worked out a system to honour the changes.
US buyers form about 20 per cent of sales at her online business SocksFox, which sells socks, undergarments and sleepwear.
She sees little choice but to hike prices if new duties are here to stay: “Our margins are too tight to be able to absorb that.”
