Changes to customs rules for low value exports to the US are set to cause “considerable” disruption to the American economy, trade experts warn, as e-commerce retailers hike prices in response to US president Donald Trump’s trade policies.
From 2 May, the US will halt the ‘de minimis’ easement for China and Hong Kong. Under the scheme, imports valued under US$800 don’t attract import duties or require customs documentation.
According to official Chinese data, reported in the Guardian, e-commerce shipping to the US has already dropped by 65% in the first quarter of 2025, partly in response to the policy change.
The Telegraph has also reported that Chinese fast-fashion brand Shein had increased its prices for US shoppers by 377%, while Amazon is also pressuring suppliers to cut prices to limit the impact of Trump’s tariff regime.
The US has said it is looking to halt the de minimis scheme for other countries but has not yet announced timelines for this. The approach comes after a surge of cheap goods entering the country in recent years, with low-value imports valued at around US$54.5bn in 2023.
Short-term disruption
Marco Forgione, director general of the Chartered Institute of Export & International Trade, told Sky News this morning that the changes are going to cause “a considerable amount of short-term disruption for the US economy”.
“The removal of de minimis will see prices increase and more pressure on the US economy,” he said.
This is happening against the backdrop of poor economic data for the US in the first quarter of the year. The US economy contracted by 0.3% in the first three months of 2025, down from 2.4% growth in the final quarter of 2024.
Forgione further noted that while imports, which aren’t included in GDP data, were actually up in Q1, this was likely to have been caused by US importers “frontloading”, by buying in stock ahead of anticipated new tariffs and other protectionist measures such as the removal of de minimis.
He expects imports to “drop off” in the coming months.
“Already, the amount of ships from China heading into the US has dropped off significantly. The amount of air freight is also dropping in advance of de minimis and we’re seeing a diversion of where goods are going.”
Dumping concerns
By contrast, Chinese shipping to Europe increased by 28% in Q1 this year.
However, both the UK and EU are also in the process of reviewing their de minimis schemes.
The EU has said it will look to stop its de minimis scheme by 2028. The UK has launched a review of its own programme, as part of a wider investigation into trade remedies.
Forgione says that both the EU and UK are doing this in order to “protect their domestic markets”.
“About 15% of the ships that were due to head from China to the US have been diverted to the UK and the EU in just the last month or so,” he said.
“What we’re likely to see now is a retaliation from the EU, and possibly the UK, to protect their domestic markets from this flood of goods that were due to go to the US but no longer have a market there.”
Not worth the hassle?
E-commerce is among the industries that typically benefit most from ‘de minimis’ schemes, which are designed to facilitate easier trade for SMEs.
These initiatives also help to streamline the amount of border checks that are needed to be completed by government agencies, since duty collection and policing is an expensive state-expenditure, and governments have generally preferred to only do it for higher value imports.
As Sky News’ economics editor, Ed Conway, explains:
“The historic arguments against collecting those fees were that a) doing so probably cost more money than it would raise, b) scanning and checking every import would jam up ports and airports unnecessarily and c) it might have a bearing on the wider economy as it throws further sand in the wheels of commerce.”
William Bain, the head of trade policy at the British Chambers of Commerce, said that the UK government needs to consider alternative ways of reducing trade friction if it does scrap its de minimis scheme.
“Simplifying rules and processes to make trade easier is vital to weathering the current storm,” he told the FT.
Amazon ‘hostile’
It’s not just the halting of de minimis schemes that is affecting the e-commerce sector, with Trump’s new tariffs also eating into the margins that tech giants like Amazon can claim from sales on their platforms.
In reaction to this, Amazon has been pressuring third-party sellers to pass on the costs to consumers and has reportedly been planning to inform customers of how much the new tariffs have added to the prices of goods sold on its marketplace.
The latter approach has been branded a “hostile and political act” by the White House, with Trump’s press secretary, Karoline Leavitt, asking: “Why didn’t Amazon do this when the Biden administration hiked inflation to the highest level in 40 years?”
‘Buy American’
Leavitt further urged US consumers to “buy American” and the Trump administration has repeatedly claimed that the tariffs will lead to many manufacturers shifting their production to the US, creating jobs and economic growth.
An Amazon spokesperson told the Guardian that while the idea of publicising the price impact of Trump’s tariffs had been discussed, doing so was “never approved and is not going to happen”.
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