U.S. to halt tariff exception for low-value parcels — a threat to eBay, Etsy trade
Trump signed executive order on Wednesday
Americans shopping for second-hand, vintage or handmade items on platforms like eBay and Etsy will face steep customs duties on international purchases next month, potentially hurting trade on those peer-to-peer sites.
In a surprise move late Wednesday, U.S. President Donald Trump signed an an executive order to remove the "de minimis" duty-free treatment on parcels under $800 from all countries, starting Aug. 29, bringing forward a change previously set for July 2027.
Currently, packages sent to the U.S. from outside the country that are valued at or under $800 are exempt from any import taxes, but they will soon face "all applicable duties."
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Trump targeted packages from China and Hong Kong earlier this year, and the White House said the recently signed tax and spending bill repealed the legal basis for the de minimis exemption worldwide starting on July 1, 2027.
That disrupted e-commerce flows for online retailers like Shein and Temu.
"Trump is acting more quickly to suspend the de minimis exemption than the OBBBA requires, to deal with national emergencies and save American lives and businesses now," the White House said in a fact sheet, referring to the bill known as the One Big Beautiful Bill Act.
Goods shipped through the postal system will face one of two tariffs: either an "ad valorem duty" equal to the effective tariff rate of the package's country of origin or, for six months, a specific tariff of $80 US to $200 US depending on the country of origin's tariff rate.
Hit to eBay and Etsy
Some U.S. businesses have spoken out against the policy in the past.
"These exemptions are a powerful tool that helps small creators, artisans and makers participate in and navigate cross-border trade," Etsy's global head of public policy and advocacy, Jeffrey Zubricki, wrote in a submission to Customs and Border Protection in March.
"Many American Etsy sellers rely on de minimis to import and export products with key trading partners, sustaining their businesses and generating income to support their families."
The majority of Etsy's 5.6 million active sellers and nearly 90 million buyers are in the United States. Etsy did not immediately respond to a request for comment on Thursday.
Meanwhile, eBay also urged the customs agency to reconsider, arguing that de minimis gives American consumers access to "a global market to find value at lower prices, particularly for used goods and a unique, collectible inventory that is not available domestically."
In a results call on Wednesday, eBay CEO Jamie Iannone flagged the elimination of de minimis outside of China as a potential disruption that may impact revenue. eBay also did not immediately respond to a request for comment.
Sharp rise in annual shipments
The acceleration follows pressure from groups that argue the exemption facilitates fentanyl smuggling and has led to a flood of cheap products entering the U.S. duty-free, undermining U.S. retailers and manufacturers.
Between 2015 and 2024, the annual volume of de minimis shipments entering the U.S. increased from 134 million shipments to over 1.36 billion shipments. U.S. Customs processes more than four million daily de minimis shipments.
This month, Reuters reported air cargo shipment volume from Asia has declined by 10.7 per cent since the U.S. cancelled the tax-free exemption for low-value packages from China early in May.
Since May 2, however, shipments sent from China and Hong Kong have been taxed at a rate initially as high as 145 per cent before settling to as low as 30 per cent after a mid-May trade detente between the U.S. and China.
Republican U.S. Senator Jim Banks of Indiana praised the action taken by the Trump administration, saying "for too long, countries like China have flooded our markets with duty-free, cheap imports."