Published by Global Banking and Finance Review
Posted on February 6, 2025
By Lisa Baertlein, Arriana McLymore and Helen Reid
LOS ANGELES/NEW YORK (Reuters) - On Wednesday, Matthew Cannon's college-age daughter forwarded him a request from delivery company DHL asking for duties and fees of $45.19 tied to her order from Australian fashion seller I.Am.Gia. She wanted to know if it was a scam.
She had ordered a $65 top to wear for Mardi Gras celebrations in New Orleans on Tuesday, and paid for rush shipping bringing the order total to $84.
DHL's message included breakdown of the fees, including $26.88 for duties and $17 for handling, and said it was due within five days from the package arrival date or the item would be returned to the sender.
Prices will rise for Americans who buy $5 shirts, $10 lamps and $20 shoes on direct-from-China shopping sites like Shein and Temu after U.S. President Donald Trump this week imposed 10% tariffs on goods from China.
He also suddenly scrapped the so-called de minimis rule for Chinese goods, a customs duty exemption on low-value packages from China with the stated aim of stopping the flow of fentanyl and precursor chemicals into the United States.
De minimis, a legal term referring to matters of little importance, describes the U.S. waiver of standard customs procedures and tariffs on items worth less than $800 that are shipped to individuals from foreign countries.
American shoppers must now pay duties for small-value direct-from-China orders, including for merchandise that was already en route before the shift.
"This was a $65 top that she could barely afford and now she has to pay $50 just to get it," said Cannon, who is chief revenue officer at Reach, a Calgary, Canada-based company that helps retailers in Europe, Australia and China sell into the United States.
Similarly, on Tuesday, Clint Reid got an email from DHL saying that a $197 order for 16 items including dresses, sweaters and baby clothes from Shein would be returned to sender if he did not pay $39.07 within five days of arrival.
That charge included $20.76 in import duties, $1.31 in regulatory charges and $17 in duty tax processing.
E-commerce firms such as Shein, Temu and Amazon.com's Haul service have proliferated to take advantage of low-value duty-free shipments to U.S. shoppers.
As of February 4, shippers or receivers must pay duties on all China and Hong Kong-origin products under the $800 threshold, regardless of how they are routed into the U.S.
Shein, Temu and Amazon did not immediately respond to requests for comment.
Private delivery companies and the United States Postal Service deliver millions of e-commerce packages that are now subject to import taxes.
As bills for duties owed start hitting text message queues and e-mail inboxes, U.S. shoppers are waking up to how Trump's trade and tariff policies directly impact their lives - and pocketbooks.
Shoppers in Europe, Canada and other markets with much lower de minimis thresholds are familiar with paying duties on online purchases, Cannon said.
"No one in the U.S. has any idea, they've never experienced it unless they bought something really expensive and typically if they buy something really expensive the retailer will cover the duties," Cannon said. "It's going to be a nightmare."
DHL Express told Reuters it has a standardized set of fees and handling charges that apply for the customs clearance process. These fees are in addition to government taxes and duties. United Parcel Service the world's biggest parcel delivery firm, said it also has systems and processes to facilitate payment of duties. FedEx did not immediately comment.
While sellers scramble to adapt, some are "eating the duties in the short term," said Bernie Hart, vice president of customs at Flexport, which offers customs, logistics and other freight-related services.
In a message on its website, youth-oriented fashion seller I.Am.Gia said U.S. customers would be asked to pay duties through the delivery company. For orders placed from February 7, the duties will be included in the price and partially offset by "slight" adjustments to prices and shipping threshold. It did not immediately respond to requests for comment.
Cider, a fast-fashion retailer that also ships direct to U.S. shoppers from factories in China and elsewhere, had a notice on its website saying shipping may be delayed "due to extended customs clearance times". A spokesperson did not immediately reply to Reuters questions about the delays.
(Reporting by Lisa Baertlein in Los Angeles; Additional reporting by Arriana McLymore in New York and Helen Reid in London; Editing by Sandra Maler)
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