A significant change in American customs policy is creating a ripple effect across the Atlantic, as numerous European parcel delivery services, including industry giants like DHL and the Royal Mail, are temporarily suspending certain deliveries destined for the United States. This disruption stems from the recent implementation of updated U.S. tariff regulations. While the typical focus of trade discussions often centers on financial burdens, the current predicament is less about the monetary cost and more about the intricate procedural hurdles and administrative demands imposed by the new rules.
Effective August 29, an executive order from the U.S. government abolished the “de minimis” provision, which previously allowed individual packages valued under $800 to enter the U.S. without incurring duties. This exemption, sometimes critically termed a ‘loophole,’ had already been revoked for goods originating from China and Hong Kong, but its universal suspension now impacts all nations. It is important to note that letters are exempt from these new regulations, and personal gifts exchanged between individuals, valued at less than $100, are also unaffected. However, commercial shipments are facing substantial alterations, as the majority of packages entering the U.S. previously qualified for this duty-free treatment.
The removal of this exemption inherently increases the cost of imported goods. Nevertheless, the principal reason behind the current pause by postal and parcel companies is not primarily the increased tariffs themselves, but rather the ambiguity surrounding policy specifics and the pressing need to develop entirely new logistical systems. DHL Group articulated this concern, stating that crucial questions remain unanswered, particularly regarding the methodology and responsibility for future customs duty collection, the additional data required, and the precise process for transmitting this data to U.S. Customs and Border Protection.
Consequently, DHL Group has ceased business shipments to the U.S. via Deutsche Post and DHL Parcel Germany, although their premium DHL Express service remains operational. The company has not provided a timeline for the resumption of these services but has indicated a strong desire to restore postal goods shipping to the U.S. as swiftly as feasible. Similarly, the French postal service, La Poste, has also halted goods shipments to the U.S., expressing that European postal operators were given an exceptionally narrow window to prepare for these new rules, which necessitate further clarification. Spain's Correos postal service has mirrored this action, citing the significant impact of the new policies and their rushed implementation on international postal logistics.
Conversely, the Royal Mail anticipates only a brief interruption of one to two days as it works to integrate new systems capable of calculating and billing companies for the revised tariffs. The White House, in a recently published fact sheet, characterized the “de minimis” treatment as a “catastrophic loophole” and a “big scam,” asserting that it not only diminishes tariff revenues but also facilitates the ingress of illicit substances due to the expedited processing that “de minimis” goods previously received, leading to reduced oversight. There is bipartisan agreement on the necessity of restricting or eliminating “de minimis” shipments. The previous administration had also voiced apprehensions regarding the entry of illicit drugs and unsafe products. Furthermore, some American businesses have contended that this exemption provided an unfair competitive edge to foreign manufacturers by enabling them to circumvent tariffs with ease.
Despite these arguments, the system of duty-free shipments does have its advocates. The Cato Institute, a libertarian research organization, has argued that abolishing de minimis shipments would disproportionately affect lower-income Americans and, foreshadowing the current logistical challenges, would devolve into an “administrative nightmare.”