Ecommerce Revolution: U.S. Eliminates ‘De Minimis’ Law, Impacting Online Retail

The United States opens a new era for international ecommerce. Starting today, the U.S. eliminates the historic minimis tax exemption, which exempted shipments of goods arriving in the country from abroad from duties as long as their value was less than $800.

The measure, which will have a huge impact on international distributors with activities in the United States, has led to the paralyzation of the operations of postal services to the United States of several countries, such as Singapore, Spain, Mexico, New Zealand, India, Germany, Austria and Belgium.

The Spanish company Correos has announced the interruption of the service of sending low-value parcels to the US by companies. “Due to the limited time to adapt to these new requirements, and in order to protect the interests of its customers,“ Correos announced Friday that it will temporarily suspend shipments to the United States and Puerto Rico until the appropriate solution has been developed and implemented to meet the new standard.

Letters and documents of no commercial value, books, as well as gifts sent by individuals with a value of $100 or less, will not be affected and will continue to be accepted.

The postal services of several countries, including Spain’s Correos, have suspended the sending of business packages to the United States

The United States has implemented a six-month transitional period in which it is possible to opt for a flat rate per mailing of between US$80 and US$200 instead of the tariff corresponding to the country of origin. The country has yet to disclose the procedure to be followed to comply with the bureaucratic procedures and pay the tariffs thereafter.

In May, Trump had already cancelled the tax exemption for shipments arriving from China and Hong Kong, although he is now extending it to packages arriving from any country in the world. It is estimated that by 2024, as many as 1.4 billion packages will have entered the United States under the minimis tax exemption. The volume multiplied over the year, from 2.8 million packages per day on average in 2023, to four million packages today.

The U.S. measure could quickly be mirrored in markets such as the European Union and the United Kingdom. In the European Union, where the tax exemption limit is set for shipments of less than €150, the European Commission proposed two years ago to abolish the minimis exemption: the plan is still pending approval by the 27 Member States and the European Parliament, in a process that could take until 2027.