Ecommerce sector ready to adapt to looming EU import reforms
Europe’s planned reforms for low-value ecommerce imports are unlikely to trigger the sharp disruption seen ...
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© Jonathan Weiss
US de minimis privileges will be wiped globally as the CBP bolsters its capabilities, with shipping rates and requirements expected to soar.
In an executive order released yesterday by the White House, the US announced it would abolish de minimis exemptions on 29 August.
The exemption allows any shipment worth less than $800 to enter the US duty-free, and applies to exports from all countries except China/Hong Kong.
President Trump suspended de minimis after declaring “a national emergency”, but then paused the decision (again except for China and Hong Kong) just days later due to the sheer volume of formal entries the CBP would have to inspect having a lack of adequate systems to do so.
However, yesterday’s order claimed there now were “adequate systems in place to fully and expeditiously process and collect duties for articles otherwise eligible for duty-free de minimis treatment on a global basis”.
The order stated: “The duty-free de minimis exemption… shall no longer apply to any shipment… regardless of value, country of origin, mode of transportation, or method of entry. Accordingly, all such shipments, except those sent through the international postal network, shall be subject to all applicable duties, taxes, fees, exactions, and charges.”
Duty on shipments sent through the postal network, however, will be calculated differently – using the relevant IEEPA reciprocal tariff for the origin of the parcel, or at $80 per item for countries with IEEPA tariffs of less than 16%, $160 per item if the IEEPA tariff is 16%-25%, and $200 per item if IEEPA tariffs are above 25%.
The transportation provider chooses which will apply and must use the same methodology across all shipments handled. They can change once a month, giving 24-hours’ notice to the CBP.
Hugo Pakula, CEO of automated customs compliance company Tru Identity, told The Loadstar: “Logistics companies are saying it’s not good for them, because it’s going to hurt their rates – shipping rates are going to go up.
“And so many people and brands, without knowing it, are taking advantage [of de minimis exemptions], and their logistics companies are going to randomly say ‘now your rates are going to increase’.”
Mr Pakula warned that CBP inspection and declaration requirements would also rise.
“We’re seeing even more requisition for technology and tools to help mitigate this, because the shipment volumes are just going to be so huge,” he said.
Indeed, the CBP is set to release a new ‘Automated Commercial Environment’ (ACE) for de minimis shipments on 12 August to automate the agency’s ability to enforce the de minimis threshold for postal imports.
Cindy Allen, CEO of Trade Force Multiplier, explained: “The different process is largely due to the fact that the postal service is the de facto importer and, as such, is not required to use a customs broker and is unable transmit entries in ACE.”
She added: “The US postal service is part of an international treaty that defines how international mail is treated in all countries that are part of that treaty. Changes to the process that impact other postal services would open up those countries to treat US postal mail sent internationally differently.
“Changes are also subject to acceptance via a formal approval process that takes years, usually.”
FedEx reminded customers that “if the value of a recipient’s aggregated imported shipments exceeds the $800 de minimis daily threshold, then informal or formal entries may be required, including payment of all applicable duties, taxes, and fees”.
And the logistics company warned: “The shipment may be subject to delays as a result.”
It added that while the “per person, per day” de minimis rule was already enforced by the CBP, “automated enforcement of this provision may lead to more consistent and comprehensive treatment”.
Shippers are advised to provide precise product descriptions, specific monetary value and currency, shipper and recipient details, as well as an HS code where required.
“Vague merchandise descriptions violate CBP requirements and may delay clearance,” said Fedex.
On Monday, a federal court rejected a request to block President Trump’s executive order ending the de minimis exemption for China and Hong Kong. The court put the case on hold until a final resolution of the other major court case examining his power to impose tariffs.
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