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For years, the US allowed parcels carrying low-value goods to enter the US duty-free. That changes on Aug 29.

WASHINGTON – Days after ordering high-end computer parts, Mr Chris Pawlukiewicz got an unpleasant surprise: a bill for US$934 (S$1,197) in tariffs he owed to US Customs and Border Protection.

“I was immediately like, ‘hell no’,” said the avid gamer from Louisiana.

He consulted Reddit and made a few calls to customer service to parse the details in his invoice – delivered by United Parcel Service on the US government’s behalf – and found that the parts he ordered from Germany had been over-tariffed.

But he still owed a 25 per cent tariff because his purchase included components originating from China and a 50 per cent duty applied to an aluminium derivative.

The final tab was about US$340 before brokers’ fees, roughly 75 per cent of what he paid for the parts themselves. What’s more, he’d had no choice but to order his gear from overseas because US retailers were out of stock.

“I’m still super confused about why I paid what I paid,” Mr Pawlukiewicz said.

Mr Pawlukiewicz was hit with tariffs because the Trump administration in May ended a longtime exception that allowed parcels from China worth less than US$800 to avoid duties, known as the de minimis exemption.

The aluminium-related levies he paid went into effect in June.

More American consumers are all but assured to encounter similar shocks starting Aug 29, when the US ends the de minimis exemption for shipments from the rest of the world – which for years had allowed parcels carrying low-value goods to enter the US duty-free.

The number of packages claiming the exemption has surged over the last decade, totalling nearly 1.4 billion in the government’s 2024 fiscal year, or roughly 3.7 million a day. That in turn has helped fuel the growth of e-commerce businesses such as Amazon.com and Shein in recent years.

President Donald Trump’s decision to scrap the policy means that surprise bills will increasingly accompany deliveries that have become a staple of modern life for many consumers.

“It’ll only be exacerbated after Aug 29 when the rest of world loses access to de minimis,” said Mr Derek Lossing, founder of logistics consulting firm Cirrus Global Advisers.

Starting Aug 29, parcels entering the country will be assessed duties based on the country-of-origin tariff rate that Mr Trump imposed using his emergency powers. Alternatively, packages shipped via international post could be assessed with a temporary flat fee of US$80 to US$200 per item, but only for the next six months.

The looming expiration has already sown chaos with logistics companies, sellers and postal services attempting to sort through a complicated and costly process with what they say are limited instructions from US authorities.

Postal services around the globe have halted shipments to the US until additional clarity emerges, further confounding the global shipping apparatus.

For companies that rely on those networks – oftentimes small businesses looking to save money – the choice they face is to either shut off orders to US customers or opt for pricier express carriers such as UPS and FedEx Corp. that are still shipping.

“If you sort of limit one channel, then that volume is going to go somewhere else,” said Mr John Pickel, vice-president of international supply chain policy at the National Foreign Trade Council, an organisation that advocates for open trade.

In the meantime, retailers with robust e-commerce operations should be prepared to handle the tariff change on their end, Mr Lossing said.

“It would be a disaster if you’re trying to get a consumer to deal with it,” he said.

Mr Josh Gachera, a college senior in Alabama, recently ordered US$1,029 Italian-made boots from a seller in Canada.

He received a US$190 bill from FedEx about a month after his boots arrived.

“I thought it was a scam at first,” he said.

With the rules seemingly ever changing and confusion abounding, Mr Gachera has yet to pay the surprise bill. He figures he will just see how everything plays out.

After all, he already has his boots. BLOOMBERG

US President Donald Trump’s move to close a duty-free exemption for small parcels has sparked confusion among postal service providers (Mandel NGAN)

The United States on Friday ended tariff exemptions on small packages entering the country from abroad, in a move that has sparked concern among small businesses and warnings of consumer price hikes.

President Donald Trump’s administration cited the use of low-value shipments to evade tariffs and smuggle drugs in ending duty-free treatment for parcels valued at or under $800.

Instead, packages will either be subject to the tariff level applicable to their country of origin, or face a specific duty ranging from $80 to $200 per item. But exclusions for personal some personal items and gifts remain.

Trump’s trade adviser Peter Navarro told reporters that closing this “loophole” helps restrict the flow of “narcotics and other dangerous and prohibited items” while bringing fresh tariff revenues.

But the monthlong lead time Trump’s order provided has sparked a frenzy.

Postal services, including in France, Germany, Italy, India, Australia and Japan, earlier said most US-bound packages would no longer be accepted.

The UK’s Royal Mail, which took a similar step, announced new services Thursday for customers to continue sending goods to the United States.

On Tuesday, the United Nations’ Universal Postal Union said 25 member countries’ postal operators had suspended outbound postal services to the country.

“Foreign post offices need to get their act together when it comes to monitoring and policing the use of international mail for smuggling and tariff evasion purposes,” Navarro added Thursday.

US officials maintain that just five percent of duty-free small package shipments arrived via the postal network, while most went through express couriers.

Yet, the impending change has brought confusion and concern to small businesses.

– Delays, cost hikes –

UK retailer Liz Nieburg told AFP she had stopped shipping products to US customers while the Royal Mail worked out a system to honor the changes.

US buyers form about 20 percent of sales at her online business SocksFox, which sells socks, undergarments and sleepwear.

She sees little choice but to hike prices if new duties are here to stay: “Our margins are too tight to be able to absorb that.”

The Trump administration has imposed tariffs in rapid succession this year.

Cornell University professor Li Chen warned that it takes time for postal services to establish systems for duty collection: “It’s not like there’s a switch you can turn on and turn off.”

“On the consumer side, there will be potential delays, because now all the parcels have to clear customs,” Chen added. Prices may also rise if businesses pass on the tariffs.

Trump India Tariffs 2025 Live Updates: US economist Richard D Wolff during an interview said the Trump administration’s decision to impose 50% tariffs on India will empower blocs like BRICS as India may sell its exports there. Wolff slammed Washington’s economic policy of punitive tariffs on New Delhi for buying Russian oil.

He pointed out India’s growing economic and demographic significance as the world’s most populous country and largest market. India’s relations with Moscow go beyond the Soviet era and US is “playing with a very different adversary here”, Wolff said. “[What US is doing] is in a hothouse-fashion developing the BRICS to be an even larger, more integrated and successful economic alternative to the West,” he explained.

Nomura in its report has said that it expects the basic 25% reciprocal tariffs to continue until FY26, but the additional 25% penalty that kicked-in on Wednesday, will be removed after November. Recently, Nomura had cut their FY26 GDP growth forecast to 6.0% from 6.2%. This downgrade is because weaker exports, job market pressures, and lower investments are likely to outweigh any positive impact from the GST.

Finance Ministry on fresh tariff challenges

As the new US tariffs on India took effect, the Finance Ministry said on Wednesday that while the immediate impact may look limited, the ripple effects on the wider economy could be challenging and need careful attention.

The Ministry added that such setbacks, if managed well, can make the economy stronger and more resilient. It also noted that if larger and financially stronger companies bear most of the short-term burden, then smaller and medium businesses in related industries will have a better chance to recover and grow. According to the Ministry, this is a moment to prioritise and act in the national interest.

Exporters prioritising manufacturing operations overseas

India’s textile and garment exporters are exploring shifting parts of their manufacturing operations overseas to protect their crucial US market following the imposition of steep new tariffs, the Financial Express reported. The additional 50% levy on Indian exports, effective Wednesday, has forced companies to consider moving the final stage of production to Bangladesh, Sri Lanka, Ethiopia, Egypt, Indonesia and Jordan.

Exporters had already shipped out winter consignments to the US, but spring orders which are currently in process, have come under strain. “Some buyers are now demanding additional discounts of 5% to 20% to offset the tariff hike,” Mukesh Kansal, chairman of CTA Apparels, told FE.

Despite the rising tensions, US Treasury Secretary Scott Bessent struck an optimistic note on Wednesday, saying he remained confident in the resilience of India-US ties. “India is the world’s largest democracy, the US is the world’s largest economy. At the end of the day, we will come together,” he told Fox Business.

Follow this space to catch our live coverage on Trump’s latest tariffs on India:

Live Updates

US Tariff on India Live Updates:

The European Commission proposed on Thursday to withdraw all tariffs on imported US industrial goods in a bid to speed up the removal of US duties on European cars.

The proposal is the first step in enacting the framework agreement between President Trump and Commission President Ursula von der Leyen, which was established last month. Trump requested that tariffs be removed before the US lowers its duties on the bloc’s auto exports.

Meanwhile, Mexico is set to join the US with tariffs and will raise duties on Chinese goods under its 2026 budget plan, Bloomberg reported on Wednesday. The proposal, due next month, targets cars, textiles, and plastics to shield local industries from cheap imports.

US pressure on Mexico stems from President Trump’s claim that cheap Chinese goods slip into Mexico before heading north. Last month, Trump granted Mexico a temporary reprieve from higher tariffs after a call with Mexico’s president Claudia Sheinbaum.

Meanwhile, Trump’s 50% tariffs on India have now kicked in, a move that experts say could upend a decades-long push by Washington to forge closer ties with New Delhi. Trump added an extra 25% tariff on Indian imports because of the country’s purchase of Russian oil.

Elsewhere, Trump said Monday that a 15% tariff on imports from South Korea will hold despite bids from the country to lower those duties.

Trump has also promised tariffs on furniture imports, saying last week that the US has also begun an investigation similar to ones conducted on various other imports.

Also last week, Canada vowed to drop its retaliatory tariffs to match US tariff exemptions for goods covered under the US-Mexico-Canada trade pact.

This comes after Trump unveiled “reciprocal” tariffs on dozens of US trade partners (which you can see in the graphic below) earlier this month.

Those tariffs face legal limbo in an appeals court case that could be decided within days.

Justice Department lawyers and lawyers for a group of small business importers who are challenging the tariffs imposed under this authority argued their positions before the US Court of Appeals for the Federal Circuit. If the court rules against the government, it’s likely Trump would appeal to the Supreme Court.

Read more: What Trump’s tariffs mean for the economy and your wallet

Here are the latest updates as the policy reverberates around the world.

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This rule made many online purchases dirt cheap for U.S. consumers. Now it’s ending

toggle caption Spencer Platt/Getty Images

For nearly a century, the “de minimis” trade exemption let people skip import fees for shipping small stuff. But after the U.S. raised its limit to $800, that small stuff became big business, driven by online shopping.

“We’re talking about 4 million de minimis packages being processed a day,” says Courtney Griffin of the Consumer Federation of America.

The de minimis rule also became increasingly contentious. Backers say it brings low prices to consumers. But critics say the rule hurts U.S. companies and allows unsafe or even illegal items to be imported without a close customs inspection.

Sweeping changes are arriving Friday, when President Trump’s executive order suspending the de minimis rule for all U.S. imports takes effect. The shift is already rippling around the world: From Asia to Europe, shipping services are pausing their deliveries to the U.S., saying they need time to figure out how to revamp their paperwork and payment processes.

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So what will doing away with de minimis mean for consumers? Here’s a quick guide:

What is the de minimis rule?

De minimis is Latin, meaning something is “trifling or of little importance,” according to the U.S. International Trade Commission. Dating back to the Tariff Act of 1930, the rule has let people avoid paying import tariffs and taxes on items of small value and minimized customs processing, including inspections.

“It was never meant to be a commercial import route” in its first decades, says Lori Wallach, director of the Rethink Trade program at the American Economic Liberties Project, a nonprofit advocacy group.

The U.S. de minimis threshold used to be $200 — that is, packages worth $200 or less were not subject to taxes and tariffs. But in 2016, the country raised the threshold sharply to $800, one of the highest in the world. The spike came out of the Trade Facilitation and Trade Enforcement Act, signed by then-President Barack Obama.

Online retailers and express delivery companies backed the change, Wallach says.

“You were now sort of creating this loophole to all the normal customs rules, including the inspection,” Wallach says. The shift eased the way for the importation of products that would have otherwise faced hurdles, she says, from safety standards to endangered species laws and bans on forced labor.

After the 2016 shift, de minimis shipments started to dominate cargo entering the U.S. The number of such shipments grew from 140 million in 2014 to 1.36 billion in 2024, according to a January press release from Customs and Border Protection.

With numbers like that, policymakers started referring to the de minimis exemption as a loophole. The rule also inspired new business models for huge discount retailers like Temu and Shein, which used de minimis to ship ultra-cheap goods directly to Americans. Smaller retailers, like Etsy vendors based outside of the U.S., also got a boost.

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Why are the changes making a splash?

Basically, Americans are “everyone’s favorite shopper,” according to Griffin of the Consumer Federation of America. “We buy a lot of stuff. And so it does mean it affects everyone as a result.”

U.S. consumers have enjoyed a flood of duty-free packages, but the de minimis system also has some serious risks, says Griffin, who is her organization’s director of consumer product safety.

“It’s created significant product safety concerns because low-value imports are facing minimal customs inspection, making it easier for unsafe or noncompliant product to enter the U.S. market,” she says.

toggle caption Asanka Ratnayake/Getty Images

Counterfeit and unsafe products that have reached U.S. consumers include bicycles, bike helmets and hoverboards, according to Wallach. Without de minimis, she adds, products will actually be inspected to make sure they’re genuine.

Beginning Friday, all products coming into the U.S. will be subject to duties and tariffs based on their origin, according to Customs and Border Protection.

The highest of Trump’s tariffs — 25% and up — apply to things like imported steel and automobiles. In contrast, Wallach says, “if you’re an Etsy crafter, it’s 10%, 15%” without the de minimis exception.

Why is Trump ending the de minimis exemption?

People who want to keep the de minimis rule say that it benefits U.S. consumers, in the form of low prices. But along with safety concerns, critics say it unfairly favors foreign companies. Earlier this year, President Trump called the exemption “a big scam.”

“It’s very important, de minimis. It’s a big deal,” Trump said in April. “It’s a big scam going on against our country, against really small businesses, and we’ve ended it. We put an end to it.”

Trump says suspending de minimis will help the U.S. lower its trade deficit, and make it harder to import illegal drugs like fentanyl.

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An earlier suspension of the exception — in February — focused on China. But the newer executive order on de minimis is global, applying to every commercial package or shipment imported into the U.S., with a few exceptions. Letters aren’t affected, for example, and people can send gifts worth less than $100 to each other.

Ending the de minimis exemption “ensures that all businesses are following the same rules when it comes to the payment of duties,” the CBP says, in a statement to NPR. The agency says it has a plan in place to enforce tariffs, adding that it “is coordinating with carriers and trade partners to minimize disruption.”

What do the changes mean for consumers?

When asked what advice she has for American shoppers, Griffin says to buy domestically when possible.

“This would be a route to avoid import fees, potential shipping delays,” she says.

People should be on the lookout for possible changes to retailers’ shipping and return policies, especially in the upcoming holiday season, Griffin says. She also says to look out for scammers, predicting they will try to profit off confusion over the new policy.

Wallach of the American Economic Liberties Project predicts there will be an adjustment period for businesses. But over time, she says, consumers will see benefits.

“Getting rid of de minimis will mean that packages get a more thorough inspection,” she says. “Now this will all go through normal channels, which is much better for consumers.”

How are other countries reacting?

With Trump’s new policy set to take effect on Friday, many international postal and shipping services are suspending delivery of some packages to the U.S. They’re trying to figure out two things: how to handle new paperwork for millions of packages, and how to collect money for duties and taxes.

“U.S. customs regulations hamper the shipping of goods to the USA,” Switzerland’s national carrier, Swiss Post, said this week. The agency says it will be temporarily unable to accept U.S.-bound goods, but document and express services would continue.

Other entities, from Japan Post to India’s Department of Posts, say they are also temporarily halting most shipments to the U.S.

About 100 countries have de minimis thresholds; the amounts differ around the world.

“Most countries have de minimis thresholds anywhere between $50 to $200,” Griffin says.

In the European Union, most shipments worth less than 150 euros (about $174) can qualify.

But the EU is contemplating making its own changes to de minimis, citing many of the same issues seen in the U.S. A recent research paper found that the EU has seen its annual number of e-commerce parcels — mostly low-value goods from companies like Temu — nearly double from a year ago, to about 4.6 billion.