Topic of the Week - How Trump's New Plan Will Change the Face of Online Shopping
As of May 2nd, your online shopping packages from China are about to get a whole lot more expensive. The Trump administration has announced the end of the de minimis exemption, which allowed US consumers to avoid tariffs on low-value packages. This change will significantly impact your online shopping experience, especially if you're a frequent buyer from retailers like Shein, Temu, and Amazon Haul.
The de minimis exemption was a little-known rule that allowed packages valued under $800 to enter the US duty-free. This exemption was used by millions of packages, with nearly 1.4 billion packages claiming it in 2024 alone. The majority of these packages came from China. However, the Trump administration has decided to end this exemption, and starting May 2nd, packages from China and Hong Kong will be subject to tariffs.
Under the new plan, packages valued under $800 and sent through the international postal network will get slapped with a fee of 30% of the value of the package or $25 per postal item. Other packages (which appears to mean parcels transported by services like DHL) will instead get hit with all the duties they had previously been exempt from: not just baseline tariffs on Chinese packages that Trump has already implemented, but also product-specific duties that could be even higher than 10 or 20 percent.
The additional fees will likely be a surprise to many consumers. The cost of products may increase, or you may be required to pay the fees to get your packages released from carriers. This change will significantly impact your online shopping experience, especially if you're used to buying from retailers that ship directly from China. Companies like Shein, Temu, and Amazon Haul rely on the de minimis exemption to keep costs ultra-low. The additional tariffs will raise costs for consumers, and retailers may need to adjust their business models to accommodate the changes.
The sudden change in the de minimis exemption caused chaos in the postal system last time, with Royal Mail issuing and then retracting a statement about suspending all shipments from China and Hong Kong. The new plan may still create issues, especially with the processing of millions of low-value packages entering the US daily. It's not immediately clear how US Border Force would handle the millions of low-value packages entering the US every day, and some studies have estimated that processing de minimis packages would cost the UK roughly $3.2 billion a year.
The end of the de minimis exemption marks a significant shift in the online shopping landscape. As consumers, it's essential to be aware of these changes and prepare for the potential impact on your online shopping experience.
eCommerce Market Stats
See some statistics relating to this week’s topics in the eCommerce market below.
eCommerce stats
- The global e-commerce market is expected to reach $6.5 trillion by 2023, with the US market accounting for around 40% of that total.
- 67% of Americans have made an online purchase in the past 30 days, and 54% of those shoppers have made a purchase from an international retailer.
- Tariffs on Chinese goods could increase the cost of goods for American consumers by as much as 25%.
- The de minimis exemption was used by over 1.4 billion packages in 2024, with the majority of those packages coming from China.
That’s all for this week…
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