US ends tariff exemption for all low-value packages
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Packages valued at or under US$800 (S$1,000) sent to the US outside of the international postal network will now face "all applicable duties" starting on Aug 29.
PHOTO: REUTERS
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WASHINGTON - The United States is suspending a “de minimis” exemption that allowed low-value commercial shipments to be shipped to the country without facing tariffs, the White House said on July 30.
Under an executive order signed by President Donald Trump on July 30, packages valued at or under US$800 (S$1,000) sent to the US outside of the international postal network will now face “all applicable duties” starting on Aug 29, the White House said.
Mr Trump earlier targeted packages from China and Hong Kong.
The tax and spending Bill recently signed by Mr Trump repealed the legal basis for the de minimis exemption worldwide starting on July 1, 2027.
“Trump is acting more quickly to suspend the de minimis exemption than the OBBBA requires, to deal with national emergencies and save American lives and businesses now,” the White House said, referring to the Bill known as the One Big Beautiful Bill Act.
Goods shipped through the postal system will face one of two tariffs: either an “ad valorem duty” equal to the effective tariff rate of the package’s country of origin or, for six months, a specific tariff of US$80 to US$200 depending on the country of origin’s tariff rate.
Between 2015 and 2024, the annual volume of de minimis shipments entering the US increased from 134 million shipments to over 1.36 billion shipments.
US Customs processes over four million daily de minimis shipments.
Reuters reported in July that air cargo shipment volume from Asia has declined by 10.7 per cent since the US cancelled the tax-free exemption for low-value packages from China early in May.
Since May 2, however, shipments sent from China and Hong Kong have been taxed at a rate initially as high as 145 per cent, before settling to as low as 30 per cent after a mid-May trade detente between the US and China.
Low-value e-commerce out of Asia has been making up an increasing proportion of global air freight and boosting airlines’ cargo businesses.
In 2024, such shipments – at 1.2 million metric tonnes – made up 55 per cent of goods shipped from China to the US by air, compared with just 5 per cent in 2018.
They have been used by companies like low-cost e-commerce platforms such as Shein and PDD’s Temu.
Republican US Senator Jim Banks of Indiana praised the action, saying that “for too long, countries like China have flooded our markets with duty-free, cheap imports”. REUTERS
