US postal policy change: Donald Trump scraps duty-free parcel exemption rule; cites tariff evasion, drug smuggling

The US ended its $800 tariff exemption for package shipments on Friday, introducing a transitional period of six months where postal service shippers may choose to pay a fixed duty between $80 to $200 per package, based on the country of origin, according to Trump administration officials.From 12.01 am EDT (0401 GMT) on Friday, the US Customs and Border Protection (CBP) standard duty rates on all international parcel imports, regardless of value, came into effect. This extends the administration's earlier cancellation of the de minimis exemption for Chinese and Hong Kong shipments, as reported by Reuters.Trump’s administration ended the duty-free treatment for parcels, citing misuse of low-value shipments to dodge tariffs and smuggle drugs."President Trump's ending of the deadly de minimis loophole will save thousands of American lives by restricting the flow of narcotics and other dangerous prohibited items, and add up to $10 billion a year in tariff revenues to our Treasury," White House trade adviser Peter Navarro told reporters."This is a permanent change," said a senior administration official, indicating that attempts to reinstate exemptions for trusted trading partners would be "dead on arrival".The de minimis exemption, established in 1938, was increased from $200 to $800 in 2015 to support small business growth in e-commerce.Following President Donald Trump's tariff increases on Chinese goods during his first term, direct shipments from China increased significantly, enabling a new consumer-direct business model for e-commerce companies Shein and Temu.These packages often entered without proper inspection, and the administration has attributed the exemption to facilitating the entry of fentanyl and its components into the US.CBP reports indicate that packages claiming the de minimis exemption increased substantially, opens new tab from 139 million in fiscal 2015 to 1.36 billion in fiscal 2024.A second senior Trump administration official reported that CBP has secured over $492 million in additional duties from packages shipped from China and Hong Kong since May 2, when their exemptions ceased.The official confirmed that complete tariff rates will apply to all packages transported by express carriers including FedEx, United Parcel Service and DHL, with these companies responsible for duty collection and documentation.