US slaps duty on cheap imports

End of 'de minimis' exemption for low-value exports to US is causing confusion

- PETER EAVIS

For many years, American shoppers have been able to buy inexpensive foreign items without paying tariffs and completing complicated customs paperwork.

No more.

Yesterday, President Donald Trump closed the loophole that gave rise to that popular flow of goods, known as the de minimis exemption. He said it had allowed fentanyl to be smuggled into the United States and had given foreign businesses an unfair advantage against American companies. Some Democrats supported the repeal of the exemption for the same reasons.

The exemption ended in May for small shipments from mainland China and Hong Kong, and now it has closed for goods from the rest of the world.

Closing the loophole has already roiled supply chains. Many foreign post offices recently suspended shipments to the United States as they grappled with the new rules. Foreign businesses that rely on postal networks currently have no way of getting goods to the United States and now fear for their future.

"It is a stark shift from the way that business has been done for quite a while," said Ryan Tanner, senior director of compliance at Flexport, a supply chain company.

Question: What is the deminimis exemption?

Answer: When the exemption was in place, a consumer in the United States could receive a foreign shipment valued at $800 (25,900 baht) or lower without paying tariffs and filling out customs paperwork that detailed the goods. These advantages helped spur an increase in de minimis shipments. Last year, there were over 1.36 billion such shipments, nearly 4 million a day, up from around 139 million in 2015, according to Customs and Border Protection.