Why scrapping the de minimis threshold is "another kick in the shins" for small businesses

From 29 August 2025, the US is shutting down a key duty-free route for exporters.

Unless the United Kingdom secures a last-minute exemption, the White House will follow through with plans to scrap the $800 "de minimis" exemption that for years let small UK sellers send low-value parcels to American customers without paying import duty.

For thousands of the UK's micro and small businesses – from jewellery makers and skincare brands to Etsy and Shopify sellers – this means every US-bound parcel will now attract customs duties and fees.

Not just a short term move

This isn't a temporary measure. From 1 July 2027, a law passed by Congress called the One Big Beautiful Bill Act permanently repeals the commercial de minimis privilege in statute.

The Executive Order brings the effect forward in practice by suspending duty-free de minimis treatment now for most commercial shipments.

How the new rules work

Courier and express shipments

• If you use couriers like DHL, UPS or FedEx, de minimis no longer applies from 29 August 2025. Each shipment must be declared in the Automated Commercial Environment (ACE) – usually by a customs broker – and you'll be charged all duties and fees that apply.

International postal parcels

For Royal Mail shipments that hand over to the United States Postal Service (USPS), there's a six-month transition period. During this window, postal carriers will do either of the following:

• Charge a specific duty per item ($80, $160, or $200).

• Apply an ad valorem (percentage-of-value) duty based on the "effective IEEPA tariff rate". The IEEPA rate is the total tariff rate imposed under the International Emergency Economic Powers Act (IEEPA), which bundles all US emergency tariffs, including "reciprocal" add-ons, into one percentage.

  From a UK exporter's point of view, this means your UK-origin goods may face a base US tariff rate plus any additional IEEPA add-ons.

• After six months, only the ad valorem method remains.

What it means for your costs

Your landed cost – in other words, the total cost of getting a product to your US customer – will now be shaped by the following:

• Product classification under the Harmonized Tariff Schedule (HTS): HTS search | CBP: determining duty rates

• Country of origin where the product was made

• Any IEEPA "reciprocal" tariffs that apply.

You'll also need to factor in these fees:

• MPF (Merchandise Processing Fee) on formal entries, ad valorem with minimum and maximum caps that reset on 1 October each year.

• HMF (Harbor Maintenance Fee) for ocean shipments.

How would this play out in practice?

If you export to the US, there are three approaches:

1. Buyer pays at delivery. If you retain your current exporting arrangements, the buyer is presented with a duty-and-fee charge before the parcel is released, often at (or just before) the door. This is known as "Delivered at Place (DAP) shipping".

   In other words, it feels like "delivery time", but they must make payment before they can receive the order. (The underlying customs entry is filed in ACE by your carrier or broker.)

2. You collect and remit at checkout. You or your platform calculate and collect duties and fees at checkout, then your broker files the entry in ACE. This method is known as Delivered Duty Paid (DDP). It typically yields fewer surprises for customers but shifts admin to you.

3. You swallow the cost and put your prices up.

What to do next: A step-by-step approach

If you currently sell, or are planning to sell, into the US market, you'll need to prepare now.

Step 1: Know your products inside out

Start by making sure every item you sell is properly classified under the Harmonized Tariff Schedule (HTS).

This determines the duty rate. You can check classifications using the official HTS search tool and confirm rates through CBP's duty rate guidance.

While you're at it, verify the country of origin – it's where the product is manufactured, not shipped from.

Step 2: Choose your shipping lane wisely

Look at your current routes. If you use couriers like DHL or FedEx, the change applies immediately.

If you ship via Royal Mail to USPS, you have a six-month transition period before the full ad valorem duty kicks in. This window could buy you time to adapt, but don't wait until it closes.

Step 3: Run the numbers

Calculate your total landed cost for each product. Include the MPF (Merchandise Processing Fee), capped yearly and adjusted each October. Don't forget brokerage fees, especially if you'll be making more formal entries (goods above $2,500).

Step 4: Review fulfilment options

If you ship large volumes or bulky items, it may be worth exploring a US-based fulfilment partner. This can cut delivery times, reduce per-parcel duties and make the customer experience smoother.

Step 5: Communicate your preferred route and costs

Let your customers know via your newsletter and email and be prepared to answer any questions they might have.

Step 6: Stay informed

Regulatory changes don't stop here. Sign up for CBP Cargo Systems Messaging Service alerts so you're first to know when duty rates, procedures or fee tables change.

How UK small businesses might be forced to raise prices

Enterprise Nation member Gareth Austin Jones, co-founder of family-run shoe brand Cocorose London, says:

"To be honest, it feels like another kick in the shins for small businesses trying to build D2C business overseas. We're still coming to terms with IOSS and €150 de-minimis into the EU.

"I feel this is going to significantly increase the cost per acquisition (CPA) of new customers in US. First-time customers will need to think harder about buying from UK brands so they'll need to spend more to acquire the same number of customers.

"To avoid what I'm sure will be higher return rates, UK brands may look to offer delivered duty paid (DPP) terms, but this will force most to increase prices into the US.

"You can see an order of $100 having additional costs of $30 to $50 depending on the rate of sales tax the US settles on. Brands will also have the extra charges of the shipping company's fees for handling duties and taxes.

"My hope is the UK government keeps de minimis at the front of mind when negotiating with the US. It could be a small giveaway for the Americans and big win for UK small business."

Gareth adds:

"At Cocorose, we have a strong repeat customer in North America. Our marketing will be direct through email and SMS and we can look to clearly communicate the impact, then perhaps use our loyalty programme to help cushion rising costs for US customers.

"We'll need to find a way through this, but for sure there will be a further impact on margins."

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