President Trump's elimination of the de minimis duty-free rule at the end of next week is set to fuel a global postal bottleneck, more specifically, with U.S. inbound packages valued at or over $100 likely facing delays as shippers scramble to figure out how the tariff collection process will work.
In just one week, President Trump's executive order will end duty-free de minimis treatment for low-value imports (items valued less than $800), closing a loophole long exploited by China to flood the U.S. with low-cost junk. The administration stated in late July that the primary goal is to end the flow of deadly synthetic opioids hidden within these small packages. Starting next week, all foreign shipments, except verified gifts under $100, will face new duties.
Under the new rules, there is quite a bit of confusion about how the new duties will be collected and how to submit the required data.
A report from Bloomberg lists a number of U.S. inbound postal supply lines beginning to experience bottlenecks because of the tariff collection confusion:
Multinational logistics company DHL cited confusion over how duties will be collected in a new letter to customers on Friday. The shipper remains operational.
"Key questions remain unresolved, 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," DHL stated in the letter.
It's not just DHL; other shippers, including FedEx and UPS, are figuring out how to collect the new tariff fee. Online sellers are also scrambling to comply.
Millions of low-value packages per day will lose their duty-free treatment by the end of next week and be subject to standard tariff rates or temporary flat fees of $80 to $200 per item for six months.
For more details on rates. Customs and Border Protection outlined last week in a bulletin how the flat fees would be calculated, corresponding to the countries' tariff rates.
"It is a real concern that the dominoes are falling and there will be a ripple effect where more and more posts announce that they will be suspending packages to the US," warned Kate Muth, executive director of the International Mailers Advisory Group, which represents the U.S. international mailing and shipping industry, quoted by Bloomberg.