(Updates to show that Royal Mail has resumed shipments to U.S.

in paragraph 21; adds that letters and gifts under $100 still

exempt from duties in paragraph 13)

By Arriana McLymore and Helen Reid

NEW YORK, Aug 29 - The U.S. administration on Friday

ended duty-free imports of packages worth less than $800, known

as the "de minimis" exemption, a decision that increases costs

for retailers around the world selling to the U.S. and will

likely cause prices to rise for American shoppers.

President Donald Trump announced on July 30 the repeal of the

duty-free treatment of parcels from every country, effective a

month later.

With this, the administration has expanded a decision in May

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 latest step means for U.S. buyers as well as

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

WHAT ARE THE REASONS?

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.

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 DOES IT MEAN?

The de minimis exemption enabled a cross-border ecommerce

surge as U.S. shoppers snapped up bargains, including $12

dresses on Temu. Until May 2, orders landed on their doorsteps

free of duties provided 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.

Letters and gifts worth less than $100 sent to the U.S. by

individuals will still be exempt from duties under the new

rules.

WHICH 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 India, South

Korea, Thailand and Vietnam.

Since the China exemption was eliminated on May 2, de

minimis volumes have 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, Germany's Deutsche Post, Japan Post,

Korea Post and others pausing shipments to the U.S. as they work

to adapt.

Britain's Royal Mail resumed shipments on Thursday, saying

customers can send parcels using a "postal delivery duties paid"

service, paying any duties upfront, as well as a handling fee to

cover additional costs of clearance into the U.S..

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

where they have tU.S..lect 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, and granted more time before the change took effect.

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

plan to increase their prices to offset tariff costs.

Platforms like eBay and Etsy, where individuals and small

businesses sell anything from vintage soccer shirts to

electronics, have advised sellers to communicate with their

customers about tariff-related price increases.