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De minimus ban could play havoc with global commerce

[ March 12, 2025   //   ]

Ending of de minimis exemptions for China could cause far greater disruption than US tariff hikes, says David Taylor, director of operations at UK e-commerce consultancy, Mark 3 International.

He says that de minimis thresholds are set by each country and imported goods below those values do not attract tax or duties. It is a scheme that works very well to support global ecommerce, which typically consists of huge numbers of small, relatively low value, packages.

In the US, de minimis is set at $800. The new administration says its abolition will disrupt the flow of opioids into the US from China.

A report from Reuters notes that the number of de minimis packages entering the US approached 1.4 billion in 2024, largely due to online shopping, adding that more than 90% of all packages coming into the the country currently use the exemption. Of those, about 60% come from China, led by direct-to-consumer retailers such as Temu and Shein.”

David Taylor commented: “Tarriff wars are bad for trade, but removing de minimis exemptions could cripple ecommerce shipments across the world. Our trade with the US is vital to our economy, and ecommerce shipments into the US are huge and growing.

“If those shipments were subject to tax it would cause serious problems for UK exporters, ultimately raising prices and creating delays.”

Taylor added; “There are opportunities for businesses to structure shipments such that they fall within the destination country’s threshold. This can streamline logistics and improve delivery times, critical considerations for the global ecommerce trader.

“To cope with rules changing for one country, an ecommerce producer there could simply switch production to a country that isn’t affected.”

Taylor continued; “De minimis rules help to smooth the flow of small value shipments, the volume of which would soon overrun customs operations, and the major parcel carriers, if they had to process taxes and duties on every package.”

In the EU de minimis is set at €150 and in the UK it is £135.

However, thresholds change, so checking that their goods fall below the de minimis threshold is a constant worry for businesses. In addition, certain goods under thresholds are subject to further restrictions.

The flexible application of de minimis thresholds can serve to make a country more attractive as a target for expansion, so they have huge national economic significance.

Taylor concluded; “De minimis ultimately means a level playing field for consumers. By removing taxes and duties on low-value goods, ecommerce exporters can compete openly with local businesses, creating a worldwide marketplace for all sorts of goods.

“It is a fundamental cornerstone of the global economy that has driven investment in infrastructure, capacity, business models and logistics.

“The best response to any changes in the rules is to seek expert advice. Failure to act is not an option, as the potential impacts can be ruinous, so it is incumbent upon ecommerce business owners to plan and adapt.”

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