No More Tax-Free Imports?

At NorthStar Consulting UK, we’ve been keeping a close eye on the ongoing “US Tariffs” situation and wanted to share some important updates with you.

Let’s get to it. On 29th August 2025,  the United States closed a quiet but powerful loophole that shaped global e-commerce for decades.

From 29 August 2025, in fact,  parcels valued at under US$800 lose their long-standing duty-free treatment.

The change arrived by executive order, and it was implemented far sooner than many market participants expected.

That is the fact, and the consequences are unfolding in real time.

International postal traffic to the United States plunged, and several national postal operators suspended or limited shipments because they lacked the systems to collect customs duties and manage returns at scale.

Logistics providers and small retailers are now wrestling with faster, more opaque costs, and consumers should expect certain low-cost import routes to get more brittle and more expensive.

Why this matters beyond politics

For years (since the 1930s to be fairly exact) the de minimis exemption made rapid, low-value cross-border trade simple.

It is the reason many marketplaces could offer cheap goods from overseas with minimal customs friction.

Remove that exemption, and you change the economics of many small parcels.

Carriers face extra paperwork and collection duties. Postal services face complexity and liability. Small sellers face unpredictable duties that can range from a modest percentage to steep, flat fees that can swamp their margins.

The experience seen after the earlier suspension for China was a warning. 

Prices rise, carriers add handling fees, and small batch importers get hit first.

Practical consequences for SMEs and consumers

Expect three near term effects.

• Cost shock for small imports. Products bought from niche suppliers will often face duties at point of entry, sometimes plus a handling fee from the carrier. That erodes margin for sellers and raises final retail prices for consumers.
• Possible logistics friction. Some countries are not yet set up to collect duties upfront. They paused shipments rather than absorb risk. That creates delivery delays, and in some cases casualty of goods that return to sender.
• Necessary structural adaptation. Big merchants and platforms will optimise around the new rules. They will bulk ship, use bonded warehouses, or route goods through intermediaries that can prepay duties.

That behaviour will be difficult for smaller sellers to replicate at scale, giving an advantage to larger, vertically integrated players.

A strategic playbook for UK SMEs

This is not a time for panic, it is a time for strategy.

If you trade with the US market as a seller, or if you source goods through low-value parcels, here are pragmatic moves to protect your business and, where possible, find opportunity.

1. 1. Audit your flows now – Map every SKU and origin, record parcel value, duties historically paid, and the role of the carrier in customs clearance. This will show where margin is vulnerable.
   2. Talk to carriers and customs brokers – Get written estimates for duty calculations, and ask about their handling fees for duties collection. Negotiate trial pricing, and test alternatives such as bonded warehousing or deferred duty programmes.
   3. Rethink packaging and unit economics – Where feasible, consolidate shipments into larger consignments that carry a lower incremental duty and lower handling cost per item. Consider local fulfilment in your target market, through a third party or by partnering with a marketplace that handles customs.
   4. Price with clarity – Be explicit with customers about customs fees. Offer landed price options where you handle duties and include them in checkout, and alternate options where the buyer accepts customs on delivery. Transparency reduces cart abandonment and reputational risk.
   5. Diversify sourcing and markets – Assess nearshoring options, and probe markets where trade friction has not increased. A modest supply chain reshuffle can protect margins and delivery times.
   6. Model scenarios and hedge cash flow – Build three scenarios, conservative, base, and worst case, showing impacts on gross margin by SKU and channel. Use them to prioritise SKUs for protected flow, and to size contingency working capital.
   7. Consider product strategy changes – For low value, high weight items, explore digital product alternatives, or services that reduce reliance on physical imports. For premium lines, emphasise the value proposition that justifies a higher landed price.

The new reality for micro commerce

This change is already disrupting real orders, real cash flows and real relationships.

Small designers and boutique sellers face an immediate choice, absorb duties, push costs to customers, or cancel sales.

Carriers have begun to layer on flat handling fees, and some postal operators paused shipments while they rework systems to collect duties.

At the same time, political and legal uncertainty is shaping the near term, so engage now with trade associations, press carriers and marketplaces for checkout based duty collection, and monitor litigation while you avoid treating it as a plan.

But disruption opens a window. The firms that move fastest to understand landed economics, to test consolidated fulfilment and bonded warehousing, and to be bluntly transparent about landed price will win trust and market share.

Customers will pay for certainty, and clarity will become a competitive advantage.

Key takeaways

The removal of the low-value duty exemption is reshaping cross-border trade with the US, creating cost, logistics, and operational challenges for small sellers.

Businesses that act quickly—auditing flows, testing fulfilment strategies, and being transparent about landed costs—will gain a competitive edge.

We at NorthStar Consulting UK can help SMEs model these changes, assess risk, and adapt strategically, turning disruption into opportunity.