Small business owners hit by axing of US tariff exemption on low-value goods

Revenue, operations impacted as duties and taxes hike shipping costs

- Daniel Lai and Rosalind Ang

Handmade glass jewellery maker Lee Chu Ling reckons the removal of tariff exemptions on low-value shipments to the US is like a lifeline cut, given that orders from the US make up 90 per cent of her monthly revenue.

With effect from Aug 29, all items with commercial value shipped to the US will be subject to duties and taxes ranging from 10 per cent to 50 per cent, depending on the product and the country of origin.

Previously, under the de minimis provision, low-cost shipments at or under US$800 (S$1,000) were allowed into the United States tariff-free.

However, US President Donald Trump in July announced the suspension of the provision, sending shockwaves across the world's small business communities that depend on low trade barriers.

With the cessation of de minimis, Ms Lee, 52, said that she expects her business, LingGlass, to be severely affected.

Postage will become more expensive for small packages as they will be subject to the tariffs. This has led to postal services such as SingPost offering a new service that is slightly slower but more affordable to help senders cope with the costs.

Countries such as Australia, New Zealand and Japan have suspended some postal services to the US in order to assess the new rules.

SingPost on Aug 19 announced that anyone sending parcels with commercial value to the US using its services can do so using the SpeedPost Express option after the suspension of standard post services from Aug 25.

Checks by The Straits Times showed that as at Aug 28, sending a parcel to the US using the tracked SpeedPost Express option would cost at least $159 for a package weighing up to 2kg.

Previously, it would typically cost Ms Lee $11.90 to send a parcel to the US using SingPost's regular service. The new shipping fee will now be higher than the cost of her products, which are priced between $25 and $120.