US end of parcel tax relief threatens eBay, Etsy trade
LONDON/NEW YORK - Americans shopping for secondhand, vintage or handmade items on platforms like eBay and Etsy face steep customs duties on international purchases in August, potentially hurting trade on those peer-to-peer sites.
In a surprise move late on July 30, US President Donald Trump ordered
the removal of 'de minimis' duty-free treatment on parcels under US$800 (S$1,000) from all countries, starting Aug 29 - bringing forward a change previously set for July 2027.
The acceleration follows pressure from groups that argue the exemption facilitates fentanyl smuggling and has led to a flood of cheap products entering the US duty-free, undermining US retailers and manufacturers.
Mr Trump ended duty-free access for low-value parcels from China and Hong Kong at the start of May, disrupting ecommerce flows for online retailers like Shein and Temu.
According to Customs and Border Protection, 1.36 billion shipments entered the US under de minimis in 2024, for a total value of US$64.6 billion.
eBay and Etsy were among US businesses that spoke out against the policy when CBP asked for feedback on the proposal to remove de minimis.
'These exemptions are a powerful tool that helps small creators, artisans, and makers participate in and navigate cross-border trade,' Etsy's global head of public policy and advocacy, Mr Jeffrey Zubricki, wrote in a submission to CBP in March.
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'Many American Etsy sellers rely on de minimis to import and export products with key trading partners, sustaining their businesses and generating income to support their families.'
The majority of Etsy's 5.6 million active sellers and nearly 90 million buyers are in the US.
Etsy did not immediately respond to a request for comment on July 31.
eBay also urged the customs agency to reconsider, arguing that de minimis gives American consumers access to 'a global market to find value at lower prices, particularly for used goods and a unique, collectible inventory that is not available domestically'.
In a results call on July 30, eBay chief executive officer Jamie Iannone flagged the elimination of de minimis outside of China as a potential disruption that may impact revenue.
eBay did not immediately respond to a request for comment.
Goods shipped through the postal system will face one of two tariffs: either an 'ad valorem duty' equal to the effective tariff rate of the package's country of origin or, for six months, a specific tariff of US$80 to US$200 depending on the country of origin's tariff rate.
It is the latest headache for small businesses grappling with hefty import tariffs imposed by Mr Trump, driving up costs, forcing many to hike prices and fuelling concerns that Americans will be paying more for everyday goods.
'The complexity of doing business with the US has gone to levels nobody could have imagined,' said Mr Andrew Wilson, deputy secretary general of the International Chamber of Commerce.
He also questioned whether US authorities can handle the tariff collections, potentially leading to delays and backlogs.
'Is border trade equipped to manage the checks and duties collection? If not, what happens with customs backlogs? It's a huge additional burden from next month,' said Mr Wilson. REUTERS
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