Small Parcels to the US Come Under Tariff Regime From Friday
New tariffs to hit e-commerce and gifts sent to relatives abroad
Chennai: E-commerce shipments as well as parcels sent to relatives in the US will now be subjected to tariffs as the US has suspended the exemptions for smaller packages valued $800 or less.
The suspension of tariff from Friday will have a six-month transition period to a new tariff regime.
The tariff rates on small packages will be calculated in one of two ways starting August 29. As per the first option, a flat rate of $80 to $200 per item, depending on the country of origin, will be levied. The second option is based on the value of the package and the “reciprocal” tariff rate set by the White House for individual countries.
The flat rate will only be available for the next six months, after which all small packages will be subject to the reciprocal tariffs of 10 to 50 per cent imposed on different countries.
According to the US administration, this tariff exemption was a loophole that permitted over one billion packages to enter the country last year without customs duties. The de minimis exemption has been in place since the 1930s, but it played a critical role in the US economy after it was raised from $200 to $800 in 2015. The exemption on import tax on items valued less than $800 helped pave the way for international e-commerce by letting retailers ship directly to the customer.
Several e-commerce companies, especially apparel players like Shein and Temu from China have been using this route for exports of low-priced goods since Donald’s Trump’s last regime, which had brought in restrictions for Chinese imports.
It was also an easy route for several Indian e-commerce companies to sell goods tariff-free in the US.
Even private persons have been using this service to send packages, especially during festive seasons, to their dear and near ones in the US. They also have been sending small consignments of medicines to their relatives.
India Post on August 25 had announced that all postal services to the United States would be suspended. Several courier companies also have suspended their US-bound services.
