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End of de minimis could be bitter pill to swallow

[ October 29, 2025   //   ]

With import duty loopholes are closing in the US, EU and UK as tariffs bite back and forth across the Atlantic, retailers are at risk of higher costs, increased complexity and facing higher risks, says Emmett Young, key accounts director for UK and Ireland at trade consultants Customs Support Group.

The rise of ecommerce and a frostier internal trade outlook has changed the conversation around low-value imports. Previously, most countries’ de minimis policies exempted imports below a certain value from duties, taxes and customs inspections to reduce administrative costs  and complexity and encourage small businesses as well as private trading.

However, tightening customs restrictions and regulations – stemming both from the post-Brexit landscape and erratic US tariffs – are making it more complex and expensive to move goods from one country to another. As international goodwill evaporates and economies struggle, many governments have sought to extract more revenues at their borders in a sweeping wave of tit-for-tat regulation.

The most impactful example of this is Washington’s recent removal of its $800 de minimis threshold for commercial shipments, which radically alters the landscape for the overwhelming majority of UK businesses exporting low-value goods to the US, including items that were previously exempt from tariffs and duties.

Second, online shopping is now a much bigger part of how we spend and in the UK, online sales as a proportion of total retail revenue have risen from 7.1% in August 2010 to 26.1% in August 2025. Fast fashion and e-commerce giants like Temu and Shein have made huge inroads into the UK market, shipping small, low-value purchases that move under the UK’s de minimis cap (£135). Chinese merchants accounted for 51% of online purchases from the UK this year.

However, pressure from British retailers could see a change to the UK’s customs regulations. At their urging, the government is currently reviewing the customs de minimis threshold. With a budget from the Chancellor due on November 26, retailers importing to the UK could end up paying 20% VAT plus import duties.

For many companies, the elimination of the de minimis exemption for the US has proven just as disruptive as the tariffs themselves, a bitter pill for many UK businesses that rely on the duty-free regime to export their goods to the US. Shipments that previously moved below customs thresholds are now subject to duties and increased documentation requirements, and even small test consignments and direct-to-consumer deliveries have become more expensive and complex to handle. Compounding the issue, carriers are now imposing clearance fees in addition to duties, which can be significant relative to low-value shipments. End customers frequently bear not only the tax burden but also added processing charges.

The immediate outcome is margin erosion. Larger brands with greater financial flexibility are absorbing these added expenses in the near term to maintain market position, but others are facing more difficult decisions. Some have temporarily halted exports to the US, others are gradually passing costs onto customers, and a few are exploring alternative markets with lower tariff exposure.

For many retailers, peak season is make or break, and the end of de minimis exemptions in both the US and the UK could be fatal for sellers this holiday season. Massive ecommerce events like Black Friday and Cyber Monday, the growth of Halloween as a consumer holiday and Christmas sales have long conspired to drive serious online spending.

Consumers have become increasingly comfortable buying from overseas. UK buyers no longer see cross-border shopping as a gamble but expect the same reliability as for domestic purchases. But the added complexity of navigating customs and importation procedures for small purchases suddenly no longer exempt could torpedo the reliability and affordability of shopping overseas.

This wave of disruption threatens to destabilise sales at a time when many businesses are feeling the pinch of reduced consumer spending power and the recent revisions to UK National Insurance contributions.

For those businesses looking to import to the UK or sell to the US, a meticulous customs clearance setup has never been more important. Small errors in trade compliance have bigger consequences than ever, potentially leading to delays, charges and the potential seizure of goods.

For organisations that have never previously had to navigate this system, an experienced partner or service provider can be the difference between successfully moving low-value goods through customs and falling foul of the new compliance landscape.

One of the most frequent and costly errors in international trade is the misclassification of goods. This typically involves assigning incorrect Harmonised System (HS) codes or misdeclaring the nature of a product. An incorrect HS code can result in audits, underpayment of duties and penalties ranging from 0.5 to 8 times the duty shortfall. Even for non-dutiable goods, misclassification can lead to fines between 20 and 80% of the product’s value, not to mention shipment delays and potential disqualification from preferential trade agreements due to origin rule violations.

Ensuring accurate classification and valuation is essential to maintaining compliance, avoiding costly disruptions and preserving profitability in cross-border trade.

Ultimately, however, the real cost of failure to manage the complexities of a post-de minimis world will be the erosion of consumer trust. No one can afford to get it wrong this peak retail season, and the elimination of de minimis thresholds in some of the world’s biggest markets presents a uniquely dangerous stumbling block.

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