New ‘de minimis’ tariff rules end many parcel shipments to U.S. : NPR

Many European parcel companies — including DHL, the Royal Mail, and the French and Spanish national post offices — are temporarily suspending some shipments to the U.S., citing new U.S. tariff policies that kick in this week.

And while the financial costs of tariffs have dominated trade news this summer, in this case, it’s not so much the money as the paperwork that’s a stumbling block.

An executive order from President Trump will end the “de minimis” rule, which allowed individual packages worth less than $800 to enter the U.S. duty-free, effective August 29. The “de minimis” rule (sometimes called a loophole) had already been eliminated for China and Hong Kong, but is now being suspended for all countries.

Letters are not affected by the new rules. Also, gifts worth less than $100 (and sent between individuals, not from a company) are exempt and can still be sent. But packages from businesses will be significantly affected. As NPR has previously reported, most packages shipped into the U.S. currently qualify for the “de minimis” exemption.

Removing the exemption raises costs for imported goods. But that’s not why post offices and parcel companies are pressing pause on some shipments — instead, they’re citing ambiguous policies and the need to establish brand-new logistics systems.

“Key questions remain unresolved,” writes DHL Group in a statement, “particularly regarding how and by whom customs duties will be collected in the future, what additional data will be required, and how the data transmission to the U.S. Customs and Border Protection will be carried out.

As a result, DHL Group says, it’s suspending business shipments to the U.S. through Deutsche Post and DHL Parcel Germany. The more expensive DHL Express service will remain an option.

DHL did not have an estimate of how long the pause would last, but said the goal “is to resume postal goods shipping to the U.S. as quickly as possible.”

The French postal service La Poste is also suspending shipments of goods to the U.S., telling France24 that European postal services were given “an extremely limited timeframe” to prepare for the new rules, and that the policies require “further clarification.” Spain’s Correos postal service is also suspending goods shipments for now, saying the new policies and their short timeframe for implementation are having a “significant impact” on international postal logistics.

The Royal Mail, meanwhile, predicted only a brief disruption of 1-2 days as it establishes new services that will calculate and invoice companies for the tariffs.

In a fact sheet published last month, the White House called “de minimis” treatment a “catastrophic loophole” and a “big scam,” arguing that it not only reduces tariff revenue but enables the importation of illicit drugs, because “de minimis” goods also get expedited processing, meaning less oversight of the goods coming in.

There’s bipartisan support for restricting or eliminating “de minimis” shipments. The Biden administration, too, had raised concerns about drugs and unsafe products slipping into the country. Some U.S. companies have also argued that it gives an unfair advantage to foreign manufacturers over American companies by allowing an easy way to bypass tariffs.

The duty-free shipments do have some defenders. The Cato Institute, a libertarian think tank, has argued that eliminating de minimis shipments would hurt poorer Americans the most and — presaging the headaches that logistics companies are encountering this week — would be “an administrative nightmare.”