As the festive shopping season approaches, changes in trade regulations have stirred concerns for consumers and businesses alike in the United States. The termination of the “de minimis” trade rule, which previously allowed shipments valued under 0 to avoid tariffs and customs duties, has introduced a wave of complications, such as delays and increased shipping costs, potentially disrupting holiday plans across the nation.
New York City, United States – Recently, the United States witnessed significant changes in trade regulations that are poised to impact how consumers and businesses navigate the holiday shopping season. The longstanding “de minimis” rule has been terminated, leading to slower shipping times, lost packages, and substantial tariff fees on international goods. This alteration, initially instituted to facilitate trade, now raises concerns for customers anticipating international deliveries.
For major international carrier UPS, the transition has proven particularly challenging compared to its competitors FedEx and DHL. Matthew Wasserbach, a brokerage manager at Express Customs Clearance in New York, described the difficulties his firm has encountered as UPS clients increasingly seek assistance with customs documentation and services. Many UPS shipments are reportedly becoming lost or disposed of as customers experience unexpected setbacks due to the new rules.
“Over the last few months, we’ve been seeing a lot of UPS shipments, in particular, becoming stuck and being lost or disposed of. Their whole business model changed once the de minimis was ended, and they just didn’t have the capacity to do the clearance,” Wasserbach explained. As frustrations mount, customers are left anticipating a chaotic holiday season.
The de minimis trade exemption, active since 2016, allowed packages valued at 0 or less to bypass tariffs entirely. Data from US Customs and Border Protection (CBP) indicated a sharp rise in such shipments—from 139 million in 2015 to over one billion in 2023. However, an executive order signed by former President Donald Trump in August abruptly suspended this exemption, leading to a surge in customs paperwork and duties depending on the shipment’s origin.
This regulatory shift adversely affected businesses like Tezumi Tea, a New York-based company that imports matcha and other related products. After the de minimis rule ended, Tezumi faced tariff issues and lost around ,000 worth of matcha due to customs delays. Co-founder Ryan Snowden noted the challenge of securing alternative shipping solutions as UPS halted operations from Japan, causing the business to pivot towards other carriers like DHL and FedEx.
The fallout is visible across various sectors, with businesses grappling with customs backlogs and unexpected costs. Wasserbach anticipates that UPS may dispose of packages that cannot clear customs, driven partly by financial pressures that discourage the costly process of clearance and delivery.
“All these additional rules and regulations impose additional pressure on already relatively tight margins for these companies,” said David Bieri, an associate professor at Virginia Tech. “Sometimes it’s easier not to fulfill a service than to take on the additional cost.”
While FedEx and DHL are facing their own hurdles in light of the new environment, they reportedly manage these situations differently, opting to work with shippers to resolve any customs issues. As these changes reshape the landscape of international deliveries, shoppers should remain vigilant regarding potential hidden fees on purchases, as the absence of de minimis protection means they may unknowingly assume the role of importers.
As the holiday season draws near, consumers will have to evaluate their spending decisions amid rising import fees and logistical complexities. Experts suggest that many may find themselves reassessing priorities, questioning where to allocate their resources during this affordability crisis. With UPS’s revenue declining due to these policy changes, the prospect of smoothly navigating the holiday shopping season remains uncertain.
To address these evolving trade policies, Wasserbach postulates that UPS may need to significantly expand hiring efforts for documentation specialists, but the pressing timeline before the holiday season complicates hopes for immediate relief. As the industry adapts to these shifts, the impact of previous tariffs on import volume from China—the carrier’s most lucrative route—still looms large. As the landscape continues to evolve, businesses and consumers alike will need to brace for a season marked by unexpected challenges.
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