🛃 The high cost of shipping abroad has always been a challenge for international e-commerce, but for many years direct-to-consumer exporters did have one significant advantage: de minimis customs entry. Unfortunately that door is closing for many markets.

De minimis entry allows goods below a certain value to enter a country free of customs duty, tax, or both, often with simplified paperwork. The name comes from the legal maxim de minimis non curat lex — the law does not concern itself with trifles. The cost of assessing and collecting duties and taxes on small parcels is often higher than the revenue collected, and for decades most governments had no wish to inconvenience travelers bringing home souvenirs or family members receiving gifts from abroad.

That has changed with the explosion of cross-border e-commerce, especially the proliferation of retail shipments from China, which has had domestic retailers in the US, EU, and other countries crying for relief and the taxman counting lost revenue.

As recently as 2016, the United States actually raised the de minimis entry threshold from $200 to $800. A flood of inbound shipments driven largely by Chinese DTC platforms followed, with inbound parcels growing from about 140 million to 1.4 billion per year by 2024. De minimis entry was also revealed as a loophole for Section 301 tariffs imposed on China as part of a broader trade dispute. Under pressure from domestic retailers, both parties in Congress pushed for change. The exemption was suspended by executive order in 2025, first for China and then for all countries. It was then repealed in law effective July 2027. (Exemptions for gifts and travelers’ personal items still apply.)

Other countries have likewise moved to limit or abolish de minimis entry in recent years. The European Union replaced its €150 duty relief with a flat €3 per HS tariff line in a parcel, plus import VAT, in July of this year. An additional €2 handling fee per consignment will apply from November. The flat duty is intended as a transitional measure until the EU Customs Data Hub opens for e-commerce in 2028, when platforms and sellers will become liable for duties and VAT at the point of sale.

The United Kingdom still applies relief from customs duty (but not VAT) on consignments up to £135, but this measure is to be removed by October 2028. What duties and handling fees will then apply has not yet been decided.

Since 2024 Switzerland has had no customs duties on industrial goods, including clothing, electronics, cosmetics, and toys, but tariffs remain on food and agricultural products. VAT is waived if the calculated tax is below CHF 5, i.e. shipments of reduced-rate items such as food or books valued up to CHF 192 are exempt from VAT — but the waiver does not apply to transactions on major international platforms such as Amazon.

Japan currently applies a de minimis threshold of ¥10,000 on most items, but certain product categories such as leather goods, knitted or woven apparel, alcoholic beverages, and tobacco products are excluded and subject to full duties and taxes regardless of consignment value. From April 2028 mail-order sales below ¥10,000 per item will be subject to consumption tax.

Singapore’s de minimis rules are a bit more complicated. Items with a CIF (cost, insurance, and freight) value of S$400 or less are exempt from border import taxes and GST, unless the seller is registered in Singapore’s Overseas Vendor Registration (OVR) system (in which case a 9% GST applies), and except for intoxicating liquors, tobacco products, motor vehicles, and petroleum products, which all face full custom and excise duties regardless of value or seller.

Canada’s de minimis system was complex even before the bitter trade disputes with the United States in the Trump era. The Canada Border Services Agency manages a multi-tiered system based on how the package is shipped and where from, with postal shipments subject to a C$20 threshold for exemption from customs duties and sales taxes. For shipments from the US or Mexico via private courier company, packages valued below C$40 are exempt from customs duties and sales taxes, while shipments between C$40 and C$150 are exempt from customs duties but subject to federal and provincial sales taxes. However, since September of this year a surtax of 15%, 25%, or 50% applies to many US goods, including those otherwise falling under the de minimis thresholds. Trade relations between Canada and the United States remain fraught and volatile, and rates, tariff lines affected, and other rules are likely to change at short notice. In any case, full duties and excise taxes always apply to alcoholic beverages, tobacco and nicotine products, and cannabis products.

Australia still maintains a de minimis threshold of A$1000 on duty; sales are subject to GST. South Korea, under the Korea-US Free Trade Agreement, has a de minimis threshold of $200 (based on FOB value) for shipments from the United States; for the rest of the world the threshold is $150. Taiwan maintains a de minimis threshold of T$2000, but limits the number of tax-exempt shipments to six per half-year. Under the USMCA, Mexico applies a full exemption from duties and taxes for courier shipments from the US or Canada valued up to US$50; a global rate of 33.5% applies to courier shipments valued up to US$2500 from outside North America.

The bottom line: DTC exporters should continue taking advantage of de minimis exemptions where they’re still available, but any export plan that relies on them could have a short shelf life.

As Canada and the United States head toward a July review of the US-Mexico-Canada trade agreement (USMCA, known in Canada as CUSMA), Ottawa has formed an advisory council with representation from affected industries, but no formal talks have begun between the two countries. Washington maintains sector-specific tariffs on steel, aluminum and autos, and U.S. officials have criticized Canadian dairy rules, liquor bans and digital policies as “trade irritants,” while Canada argues U.S. tariffs violate existing commitments.

Canada’s Prime Minister Mark Carney said last week that the United States cannot “dictate the terms” of the trade agreement but noted that the review “will take some time.”

Uncertainty around USMCA and persistent tariffs are complicating supply chains and investment decisions. The United States and Canada are each other’s largest trading partners, but relations have been strained under the Trump administration’s aggressive tariff policies.

EU-Mercosur Agreement Set for Provisional Implementation

The European Commission has signaled it is ready to provisionally implement the EU–Mercosur free trade agreement as soon as at least one Mercosur state ratifies it, despite the European Parliament’s vote to delay ratification pending a legal review by the European Court of Justice. Council President António Costa is backing interim application despite objections from France over protections for farmers, while supporters like German Chancellor Friedrich Merz and South American agricultural exporters highlight the deal’s promise to cut tariffs, create one of the largest free trade zones, and lower prices for more than 700 million consumers. European Interest

EU & India Close to Completing Trade Agreement

The EU-Mercosur agreement is not the European Union’s only major trade initiative in the news. European Commission President Ursula von der Leyen said at the World Economic Forum in Davos that the EU and India are close to finalizing a “historic” free trade agreement, calling it the “mother of all deals” that would create a market of 2 billion people with nearly a quarter of global GDP. Von der Leyen will visit India next weekend to advance efforts to deepen economic ties and cooperation between the two sides. The Print

The India–EU Free Trade Agreement is increasingly seen by both sides as a strategic necessity, not just an economic choice, in pursuit of resilient supply chains, green and digital transitions, and “open strategic autonomy.” A broad FTA could boost India’s labour-intensive exports and infrastructure and green transformation, while opening major opportunities for EU firms in manufacturing, digital, and renewable sectors, alongside cooperation in areas like clean hydrogen and digital public infrastructure. Diplomatist

The deal helps Europe diversify away from over‑reliance on Russia and China, bolsters India’s status as a major manufacturing and tech hub, and embeds environmental, labor and regulatory standards in a more calibrated form of globalization. Despite domestic concerns on both sides, the agreement is a signal that carefully negotiated open trade remains possible amid rising economic nationalism. EU Today

Trade Chaos Likely to Continue…

SupplyChainBrain has published a video interview with international trade lawyer Scott Maberry on navigating the changing trade enforcement landscape. Maberry notes that while China has temporarily eased planned restrictions on exports of rare earth–containing products after tariff concessions by the Trump administration, companies should not assume reliable long‑term access to critical minerals, because both China and the U.S. can rapidly re‑tighten controls “with the stroke of a pen.” High U.S. tariffs on Chinese goods are likely to remain for the foreseeable future, Maberry argues, so importers and exporters need to treat elevated, volatile trade barriers as the new normal, strengthen compliance with customs rules (especially accurate tariff classification under the Harmonized Tariff System), reevaluate supply chains and sourcing to mitigate tariff exposure, and use technology such as artificial intelligence to manage classification and trade data. He also urges companies to renegotiate supplier contracts so tariff‑driven costs can be shared or adjusted, noting there is no rule that importers must permanently bear all tariff costs. Maberry expects the coming year to be at least as chaotic for trade enforcement as the last, with no clear stabilizing forces in sight.

Despite Donald Trump’s pullback this week from threats to impose new tariffs or even order a military occupation of Greenland, Bob Brewer of Braumiller Law Group argues that escalating geopolitical conflicts and threats of U.S.-led military action or coercive tariffs—from Russia’s war in Ukraine to hypothetical or threatened U.S. moves involving Greenland, Venezuela, Iran, Mexico, Canada, and even New Zealand—are fracturing the rules-based international order, weaponizing trade and sanctions, and pushing countries to diversify away from U.S.-centric supply chains, thereby creating deep, systemic disruptions in global trade, investment, and economic stability.

… but Sustainability is Playing a Greater Role

On a more positive note, Nayana Ruke describes in GlobalTrade how modern trade is undergoing a major shift from a narrow focus on efficiency and low cost to a broader model grounded in environmental responsibility, social equity, and long-term economic viability, making sustainability a core competitive requirement rather than an optional ethic. She notes how “green logistics,” sustainable sourcing, and circular economy principles aim to decouple growth from ecological harm, while fair labor standards and transparency initiatives such as Fair Trade and supplier codes of conduct address human rights risks in global supply chains.

AI Can Help Traders Keep Up With Regulatory Changes

An increasingly salient trade-policy fear — missing critical tariff or regulatory changes — motivated a futures trader to develop “Trinity,” an automated system that combines AI planning (Claude), large-scale document screening (Gemini API), and Python-based logging and verification to monitor thousands of government policy documents at low cost and high speed, while still relying on human expertise for final judgment. The GlobalTrade article explains why manual policy tracking is structurally impossible for most firms due to expert scarcity, fatigue, speed, and cost, and shows how AI can transform this potentially multimillion-dollar task into a reproducible workflow costing under twenty dollars per large run, while still requiring humans to resolve ambiguous, multi-industry cases. The core message is that domain experts do not need to learn coding; instead, by articulating their worries and requirements, they can use AI to automate the heavy lifting of collection and initial analysis, then apply their own judgment to build trustworthy, scalable policy-intelligence systems that were previously out of reach.

As he had repeatedly threatened on the campaign trail and since his election, Donald Trump signed an executive order this weekend under the International Emergency Economic Powers Act (IEEP) imposing tariffs on the US’s three largest trading partners, accounting for over a third of America’s total trade volume. The order places 25% duties on goods from Canada other than oil and gas, which are subject to a 10% duty, as well as 25% on imports from Mexico and 10% on goods from China. Following a preliminary border security agreement reached today with Mexico, with further negotiations on security and trade issues ongoing, the tariffs on Mexican products have been suspended for one month. The order also eliminates the de minimis exception for shipments valued below $800 subject to the tariffs, impacting online retailers like China’s Temu and Shein.

Barring last-minute breakthroughs, the Canada and China tariffs are set to take effect tomorrow, February 4. Implementation details can be found in Customs and Border Protection notices for China and Canada currently pending publication in the Federal Register.

Notably, these tariffs have not been presented as a response to any disputes actually concerning international trade. Instead, Trump has repeatedly stated that they are intended to force cooperation from the affected countries on stemming the flow of drugs, particularly fentanyl, and illegal immigrants into the United States. Taken at face value, this is somewhat puzzling: unless Trump’s talk of annexing Canada as America’s “51st state” is to be taken seriously, it is unclear what the president actually wants from Canada, as both immigration and drug flows at the US northern border are far smaller than those from Mexico.

Canada promptly responded with a list of US products including fruits and vegetables, juices, alcoholic beverages, household appliances, and sporting goods subject to its own retaliatory 25% tariff, to be implemented this month in two stages. The country’s Department of Finance has published a complete list of the US products affected. Prime Minister Justin Trudeau also said Canada will file a complaint with the World Trade Organization (WTO). Canadian sports fans’ booing of the US national anthem at weekend hockey and basketball games may signal a shift in consumer sentiment against American brands in favor of “buy Canadian”. Several provinces began removing US spirits and wine from liquor store shelves over the weekend. Ontario premier Doug Ford announced that his province had canceled a CAD 100 million contract with Elon Musk’s Starlink and that US companies would be excluded from provincial procurement contracts until the tariffs are removed.

According to Mexican president Claudia Sheinbaum, 10,000 Mexican National Guard troops will be deployed to the border region, while the United States has agreed to combat trafficking of American firearms to Mexico. She had previously stated that her country was prepared to counter the Trump tariffs with “Plan B”, an as-yet unspecified package of tariff and non-tariff measures.

China’s response to the tariffs has been more muted, with leaders promising to complain to the WTO, but also preparing to resume discussions and present new proposals to increase imports and investment and to reduce exports of fentanyl precursors under the Phase One trade agreement with the United States, signed in 2020 but never fully implemented.

While theoretically importers facing tariff costs could accept lower margins or negotiate lower prices with foreign suppliers, in practice most of the cost of the tariffs levied during Trump’s previous term was passed on to consumers.

Should negotiations fail and an extended trade war ensue, the US holds the upper hand against each individual country, but could face difficulties in a multi-front war, especially if tariffs are also levied on the European Union as Trump said Sunday “will definitely happen”. Several European heads of state expressed defiance after a summit today, warning that hostile measures between the US and the EU would only benefit China. Mexico and the EU updated an existing agreement in January to ease trade in food and beverages, suggesting opportunities for coordination among the target countries.

I intend to keep up with the trade policy changes implemented by the new US administration, but I don’t want to rebroadcast every new social media post from Donald Trump, so for the most part I plan only to write about confirmed official measures. Still, I do think some of the new details that have emerged this week, and how international media are responding, are worth noting.

The Singapore Straits Times reports that Trump intends to impose 25% duties on all imports from Canada and Mexico as well as a 10% tariff on imports from China to the United States beginning February 1. The president accuses China of sending fentanyl to Canada and Mexico from where it is then smuggled into the United States, along with illegal immigrants. He has also accused China of failing to live up to promises to import American agricultural products made during his first term in office.

While mostly taking a conciliatory tone and expressing willingness to address American concerns, all three countries have also vowed to retaliate against any new US tariffs.

The French newspaper Le Monde quotes Mexican president Claudia Sheinbaum saying, “It’s important to always keep a cool head and refer to signed agreements,” referring to the USMCA trade pact concluded during Trump’s first administration which is scheduled for review next year.

Germany’s Die Zeit covers (in German) new threats to levy duties on goods from the European Union, which until now has been a less frequent target of Trump’s pro-tariff rhetoric.

It appears significant that Trump has tied most of the tariff threats to issues such as drugs and immigration that are not directly related to trade. This suggests that there is room for negotiation on these issues that could, one hopes, still avert any severe disruptions to the global economy. In the EU case, however, he mentioned the trade deficit and accused Europe of being “very, very bad to us” by refusing to buy American cars and farm products.

The EU tariff threat is bad news for, among others, American whiskey distillers. As part of a trade dispute during Trump’s first term, the European Union levied duties on US whiskey initially set at 25% and later scheduled to rise to 50%. The measure was suspended with the easing of trade tensions under the Biden administration, but the suspension is due to expire on March 31.