Another shot has been fired in America’s global trade war.
Driving the news: The U.S. revoked the “de minimis” clause yesterday, a long-standing duty exemption for parcels under US$800 that are shipped to the U.S. from businesses outside the country. In response, more than 25 nations, including the U.K. and China, have suspended postal service to the U.S.
- The move is meant, in part, to reduce shipments of ultra-cheap goodies from Chinese e-commerce sellers, which are clogging up the U.S. postal system.
- Last year, over 1.3 billion de minimis parcels were shipped to the U.S., accounting for 92% of all cargo.
Why it matters: Revoking the de minimis inconveniences way more companies than just Temu and Shein. The additional duties will make shipments from foreign small businesses far less attractive from a price standpoint, and also create confusing new red tape for sellers.
- U.S. customs will only accept parcels with the duty prepaid, and sellers must now include a code detailing what duties apply as well as paperwork detailing manufacturer info.
- That latter stipulation could be particularly burdensome for antique or vintage sellers, who could have trouble finding manufacturing or country of origin info for dusty relics.
In Canada: Etsy and eBay won’t print Canada Post shipping labels, forcing it to find a third-party shipper. Ultimately, when combined with tariffs, the de minimis removal could devastate businesses that rely on U.S. sales. Look at Montréal fashion platform Ssense, which just filed for creditor protection, saying the removal contributed to a “liquidity crisis.”—QH