U.S. shoppers have enjoyed cheap, duty-free international packages from overseas retailers, but that’s changing. The “de minimis” exemption, which allowed duty-free shipping on packages worth $800 or less, ends on August 29. Now, all international packages will face tariffs ranging from 10% to 50% or a flat duty between $80 to $200 per item, depending on the country of origin. Consumers might not pay all the tariffs, depending on certain conditions. Merchants should aim to make import costs clear, but some confusion is expected. Shoppers should check product origin and shipping details to avoid surprises.
NEW YORK (AP) — U.S. consumers have gotten used to shopping the world without paying customs duties on the international packages they receive from big e-commerce companies like Shein and Temu, specialty shops and businesses that sell goods through online marketplaces like Amazon, Etsy and eBay.
That era is about to end. On Friday, the United States plans to eliminate a tariff exemption that allowed imports worth $800 or less to enter the country tax-free. With the sundowning of the “de minimis” exemption, such shipments will incur charges that range from 10% to 50% of their declared value or, for the next six months, a flat duty of $80 to $200 per parcel.
“Consumers are going to be shocked,” Alison Layfield, vice president of product development at international shipping and logistics provider ePost Global. “They are going to end up, I think, (with) sticker shock, or somewhere along the way, they’re going to see that extra cost.”
Customers won’t necessarily be on the hook for paying all of the import taxes on their orders, depending on where they shop, what they buy and how much of the cost retailers decide to foot themselves. But given the confusion foreign postal services, private shipping companies and merchants have expressed about the new duties, some delays and other hiccups may be inevitable.
Here are some factors to keep in mind when shopping online to avoid a surprise customs bill.
It seems simple, but it's not always easy to find the country of origin for items sold online. Be sure to click on the product description and keep expanding and looking because the information may not be included high up, ePost Global's Layfield said. Once you find it, look up the U.S. tariff rate for that country's goods to estimate what the import costs will be, or check if the seller lists tariff duties at checkout.
Shoppers may or may not have to pay the charges to get their orders through customs and released for delivery once they are in the U.S. At checkout or in the item description, look for the terms “delivered duty paid” or “delivered duty unpaid.” The former means the vendor plans to pay the import tax and handle any related paperwork, though some may increase customer prices to recover the costs. If a website says the duty is unpaid, also known as “delivered at place,” paying it will fall to the buyer.
Another way to avoid import taxes is to check if the company you're buying from is fulfilling the order from a U.S. warehouse. Check for a “ships from” note in the product details to see where an order will be packaged and dispatched. EBay users, for example, can filter their searches for only products that ship from the U.S. Brands with overseas headquarters should make it clear if ordered items will be prepared and shipped from within the U.S.
Once a package arrives in the U.S., the first stop is a customs clearinghouse. There, a border agent reviews the digitized Harmonized System (HS) code on the customs declaration. The code is a numerical method used worldwide to classify traded products and determine duty rates.
If the package was shipped via the international postal system, which the U.S. Postal Service is a part of, and you owe customs fees or duties on it, you may need to pay them at the time of delivery or pickup. Courier services like DHL, FedEx and UPS either bill customers or require payment on delivery.
The last thing sellers and shippers want is angry customers, so they have an incentive to make any any costs connected to the end of the exemption as clear as possible. Unfortunately, there's not much consumers can do once they receive an unexpected customs bill. If you don't think the duty owed is correct, you can dispute it. You also can refuse to take delivery, but you might not get a refund.