Australian exporters selling directly to US consumers should be aware of a recent change to US import regulations. Until recently, goods valued under USD $800 qualified for the de minimis exemption and were not subject to tariffs or import duties.
This exemption has now been removed by executive order, effective 29 August. As a result, all goods entering the US are now subject to import taxes, duties and clearance requirements, regardless of value.
Implications for Exporters:
- Higher Export Costs: Every shipment to the US will now attract duties and taxes. In addition, customs brokerage and clearance fees are likely, placing upward pressure on overall export costs.
- Disruptions to Logistics: Full customs clearance is now required for every parcel, increasing administrative requirements and border delays. In response, a number of international postal services – including Australia Post – have suspended or restricted US deliveries. While some carriers have resumed operations, ongoing reliability is uncertain.
- Review of Business Models: Businesses that rely on low-cost international shipping will need to reassess their pricing, logistics and overall market approach. The new rules shift competitiveness towards US-based suppliers, which may reduce the viability of certain Australian exporters in the short term.
Options Moving Forward:
To adapt, exporters may consider:
- Using private courier networks (e.g. FedEx, UPS) that remain operational and provide support with customs processes.
- Implementing a Delivered Duty Paid (DDP) model, building taxes and duties into the retail price for greater transparency.
- Diversifying into other international markets where more favourable trade arrangements exist, if the US market becomes uneconomical.
This policy change represents a significant shift in the cost and compliance environment for Australian exporters. Reviewing your export strategy, pricing structures and logistics arrangements is now essential.
