NEW YORK, Aug 29 -

The Trump administration on Friday ended U.S. duty-free

imports of packages worth less than $800, the so-called "de

minimis" exemption that has fueled a

surge in shipments

from global sellers to U.S. consumers who will now likely

face higher prices.

President Donald Trump announced on July 30 the repeal of

duty-free treatment of parcels from every country effective a

month later. The tariffs make shipments to the U.S. from

overseas retailers more expensive, unless the sellers absorb the

tariff costs.

With this, the administration has expanded a May move to

impose tariffs on these shipments from China and Hong Kong,

affecting retailers such as Shein and Temu, which primarily ship

from China.

Here's what the new step means for U.S. buyers as well as

some small U.S. businesses that work with overseas suppliers.

WHAT ARE REASONS FOR THE MOVE?

The Trump administration has cracked down on de minimis because

it says the exemption has enabled traffickers to easily send

parcels containing fentanyl into the country.

U.S. retailers and industry groups also opposed the

exemption in the belief it gave an unfair advantage to foreign

e-commerce companies such as Shein and Temu as well as some

third-party sellers on Amazon ( AMZN ). Amazon ( AMZN ), Shein and Temu declined

to comment.

For example, prices of merchandise at Walmart ( WMT ) or

Target ( TGT ) already reflect tariffs paid by the retailers

when they import the goods, making them comparatively more

expensive.

WHAT IT MEANS?

The de minimis exemption enabled a cross-border ecommerce

surge as U.S. shoppers snapped up bargains like $12 dresses on

Temu. Until May 2, orders landed on their doorsteps free of

duties as long as their packages were valued at less than $800.

In fiscal 2024, 1.36 billion shipments arrived under de

minimis with a declared value of $64.6 billion.

According to U.S. government data, about 73% of de minimis

packages entering the U.S. originated from China in 2024.

WHAT COUNTRIES ARE MOST AFFECTED?

Canada, Mexico and the United Kingdom are the next biggest

senders, according to CBP figures. Logistics provider Red Stag

Fulfillment said other significant sources include South Korea,

India, Vietnam and Thailand.

Since the China exemption was eliminated on May 2, de

minimis volumes have already fallen by about a third, Red Stag

said.

Small British businesses selling online to U.S. shoppers

have already alerted customers to price increases. Sewing

pattern and fabric company Merchant & Mills, for example,

announced in an Instagram post that it would increase its U.S.

prices by 15% to cover duties.

WHAT ARE THE RIPPLE EFFECTS?

The change has caused turmoil in postal services across the

world, with Australia Post, Britain's Royal Mail, Germany's DHL,

Japan Post ( JPHLF ), Korea Post and others pausing shipments to the U.S.

as they work to adapt.

"It's very challenging for the post to go into an

environment where they have to collect duties, when they've

never collected duties," said Clint Reid, founder and CEO at

Zonos, whose software helps businesses calculate, collect and

remit duties.

U.S. Customs and Border Protection said it was taking the

necessary actions to implement the order.

The new tariff regime will also increase paperwork for

sellers as U.S. customs requires information on the origin and

type of goods in packages.

In February, the Trump administration paused its initial ban

on de minimis shipments from China, as packages piled up at U.S.

customs.

WHAT DOES IT MEAN FOR ONLINE RETAILERS?

Ecommerce giants Shein and Temu have had time to adapt to

the change since May. While prices on Shein have started to

increase, the latest change may put it in a better position than

some rivals, said Yao Jin, associate professor of supply chain

management at Miami University.

"It is now economical to ship out of China on a relative

basis, simply because the cost of shipping direct from other

countries has also risen," Jin said.

HOW ARE SMALL BUSINESSES AFFECTED?

It's harder for small businesses to absorb tariffs, and some

are planning to increase their prices to offset tariff costs.

Platforms like eBay ( EBAY ) and Etsy ( ETSY ), where individuals and small

businesses sell everything from vintage soccer shirts to

electronics, are advising sellers to communicate with their

customers about tariff-related price increases.