NEW YORK CITY, New York: U.S. shoppers who have grown used to ordering cheap goods from overseas will soon see higher prices at checkout. On August 29, the Trump administration ended the "de minimis" exemption that allowed duty-free imports of packages valued under US$800, a rule that has helped fuel the boom in cross-border e-commerce.

The change means foreign sellers, from Chinese fast-fashion platforms like Shein and Temu to small British craft shops, will face new tariffs on shipments to the U.S. Unless those sellers absorb the costs, American buyers will pay more.

The White House first targeted shipments from China and Hong Kong in May, citing concerns over fentanyl trafficking and unfair advantages for foreign e-commerce. Now, the rollback applies to every country. "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, CEO of Zonos. This firm helps retailers manage cross-border compliance.

Why end de minimis?

Administration officials argue the exemption created loopholes for drug traffickers, making it easier to send fentanyl into the U.S. Domestic retailers also lobbied for the change, saying companies like Shein and Temu could sell products duty-free. At the same time, their own imports were taxed, leaving chains such as Walmart and Target at a disadvantage.

The scale of the shift

The de minimis rule was a key driver of online shopping growth. In fiscal 2024, U.S. Customs and Border Protection processed 1.36 billion shipments under the exemption, worth $64.6 billion. More than 70 percent of those packages came from China. Since China's exemption was eliminated in May, volumes have already dropped by a third, according to logistics provider Red Stag Fulfillment.

Other top senders include Canada, Mexico, and the U.K., with significant flows also coming from South Korea, India, Vietnam, and Thailand.

Ripple effects abroad

Postal services worldwide have been forced to pause or slow deliveries to the U.S. while adapting to new paperwork and duty collection rules. Australia Post, Britain's Royal Mail, Germany's DHL, Japan Post, and Korea Post are among those adjusting.

Small exporters have also raised prices. British sewing brand Merchant & Mills told U.S. customers it would increase prices by 15 percent to offset new tariffs.

Impact on sellers and buyers

The change brings uncertainty for consumers. Duty charges will depend on where goods are shipped from, how sellers handle import costs, and whether couriers collect fees at delivery. Tariffs could range from 10 percent to 50 percent of value or, during a six-month transition period, be applied as flat fees of $80 to $200 per parcel.

Large e-commerce firms may adapt more easily. Shein and Temu, already preparing since May, may even gain an edge as shipping costs rise elsewhere. "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," said Yao Jin, supply chain professor at Miami University.

However, for smaller businesses on platforms like eBay or Etsy, absorbing or passing on costs will be harder. Many are warning customers of higher prices.