The de minimis exemption that allowed packages under $800 to enter the U.S. duty-free has ended for all countries, after an earlier suspension for China. The change raises import costs for direct-to-consumer shipments and shifts costs onto American shoppers and logistics providers. Low- and middle-income consumers will face reduced purchasing power as inflationary pressures increase. Apparel and footwear could see the largest price increases, estimated at 15%–25%, due to manufacturing origins. U.S. Customs and Border Protection has collected hundreds of millions of dollars in additional duties since the exemption ended for China and Hong Kong.
Now, this landscape is changing, adding to inflationary pressures that will squeeze everyday purchasing power, particularly for low- and middle-income Americans, experts tell Fortune. "It's a different shock to the system at a different level than what we've seen with the tariffs on large industrial goods," Rob Haworth, senior investment strategy director at U.S. Bank, told Fortune. "It does start up another near-term challenge for consumers and for businesses and spending overall."
The de minimis exemption ended in May for imports from China, where an estimated three-quarters of goods under the $800 threshold came from, with a large share coming from e-commerce companies Shein and Temu. The de minimis suspension for parcels from all other countries implemented Friday now means the American dollar won't buy as much as it used to, when it comes to shoppers purchasing goods made overseas.
"Categories like footwear and apparel will see some of the highest impacts, estimated at 15%-25% increased end consumer pricing, given the manufacturing origin often being China," Sean Henry, CEO of Stord, an e-commerce and fulfillment company, told Fortune. A senior Trump administration official said that the U.S. Customs and Border Protection agency has collected more than $492 million in additional duties on packages shipped from China and Hong Kong since ending the exemption.
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