Fri, 29 Aug 2025

Fri, 29 Aug 2025 'It's a chaotic mess': UK firms warn over US small parcel tax

The US scraps its de-minimis exemption, meaning no more duty-free entry of small parcels to the US.
UK businesses are warning that new taxes on low-value parcels sent to the US will bring uncertainty and price hikes, particularly for small firms. The change comes after US President Donald Trump ended the "de minimis" exemption, which allowed goods valued under $800 (£592) to enter the US without paying border taxes. From Friday, packages worth less than $800 will face a 10% tariff rate, as well as extra fees from shipping providers for handling duties and taxes. Small business owners say they are struggling to adapt to the new rules, with some deciding to stop shipping to the US altogether. Helen Hickman of hand-dyed wool company Nellie and Eve in Carmarthenshire said she had stopped selling to the US due to uncertainty over costs. "There's no way of giving customers an upfront cost," she said. Jay Begum, who sells handmade wooden decorations through her London-based business Knots of Pine, has also decided to stop shipping to the US, citing a significant impact on her sales. She now plans to focus on the UK market and boost domestic sales through marketing efforts. The Federation of Small Businesses (FSB) is warning that the change will push up costs and create new barriers for small firms trying to compete with bigger brands. FSB policy chair Tina McKenzie said: "Small firms in the UK have already been hit by US tariffs, and this decision will make it even harder for them to export goods to the US." The FSB is calling on the UK government to provide more support, including raising the Trading Allowance from £1,000 to £3,000. McKenzie said: "We want clear, practical rules, time to adapt, and systems that keep trade moving."
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