Key facts
- US and EU small international parcel volumes fell significantly after tariff exemptions ended.
- Shipments by weight dropped 70% after the 'de minimis' rule was closed.
- The 'de minimis' rule allowed shipments valued below $800 to avoid customs duties.
- An estimated one billion packages were imported using the 'de minimis' method in 2023.
- The value of 'de minimis' packages totaled over $54 billion in 2023.
The volume of small international parcels entering the U.S. and the EU has seen a substantial decline following the termination of tariff exemptions for such shipments. A report from the Universal Postal Union, a United Nations body overseeing global postal policies, indicated that shipments by weight decreased by 70% after the closure of the 'de minimis' rule.
This decades-old loophole, which allowed shipments valued below $800 to bypass customs duties, had become a primary route for online purchases from China. In 2023 alone, an estimated one billion packages were imported under this exemption, totaling over $54 billion in value. The closure of this loophole is expected to impact the business models of successful Chinese e-commerce companies like Shein and Temu, which have relied on bargain-basement prices and direct-to-consumer shipping.
Retail analyst Neil Saunders noted that companies will either absorb the cost of tariffs, potentially reducing their margins, or pass the costs to consumers, which could decrease sales given their low-price strategy. The situation also raises concerns about increased scrutiny from customs agents, potentially leading to shipping delays. The U.S. Postal Service temporarily halted acceptance of packages from China and Hong Kong but has since resumed operations, working with customs officials to implement a collection mechanism for the new tariffs while aiming to minimize delivery disruptions.