Overview: The End of the $800 De Minimis Threshold
For nearly a decade, UK small businesses enjoyed a simplified process when shipping low-value goods to the United States. Orders under $800 (about £590) could enter the US duty-free with minimal customs formalities. That all changed on 29 August 2025, when the US government removed the $800 “de minimis” threshold for commercial shipments. This policy shift affects the vast majority of UK exporters sending product-based goods (from fashion to food and more) directly to American consumers. Previously exempt parcels must now go through full customs clearance and no longer benefit from automatic duty-free entry.
This change was driven by U.S. concerns that the de minimis rule was being abused. Officials cited unfair advantages for foreign e-commerce sellers and even smuggling of contraband as reasons to eliminate the exemption. In 2021 alone, UK businesses shipped about $5 billion worth of goods to the US under the de minimis rule, proving how significant this channel was for small exporters. Now, all shipments – regardless of value – face tariffs, duties, and stricter customs requirements. Below we explore what risks this poses to UK small businesses and practical steps to overcome these challenges.
What the Rule Change Means for UK Businesses
Costs are rising
All low-value UK exports to US are now subject to import tariffs and duties. The exact tariff depends on the product category (Harmonized Tariff code) and country of origin. Notably, items made in the UK now incur a 10% import tariff under new U.S. reciprocal trade measures. (For comparison, EU-made goods face a 15% tariff in the US.) These tariffs stack on top of any normal Most-Favored-Nation (MFN) duty rates, meaning some products could see a total duty rate well over 10% and in certain categories even up to 50%. In addition, shipments will attract customs processing fees. All these extra charges can significantly cut into profit margins or force price increases.
More red tape
Every parcel to the US must now undergo full customs clearance, which brings increased paperwork and data requirements. Fields that used to be optional are now mandatory. UK businesses must provide accurate product descriptions, HS tariff codes, and the country of origin for each item (and even for key components). This information enables U.S. Customs to calculate the correct duties and check for any additional tariffs. Getting these details wrong can result in clearance delays or even shipments being rejected. The administrative burden on small businesses is therefore higher – they may need to invest time in learning customs classification or use customs brokerage services to get it right.
Potential delivery delays
The end of the de minimis shortcut means parcels may take longer to reach U.S. customers. Under the new rules, each package is processed individually by U.S. customs, which can add a few days to delivery times. If import duties or taxes are due on a package, the parcel won’t be delivered until those fees are paid by someone (either the sender or the recipient).
Customer experience challenges
With these changes, American customers face extra costs and steps to receive their orders. Where previously a $50 item from the UK arrived with no questions asked, now a U.S. shopper might be told to pay, say, $5–$15 in duty before they can get their package. This can lead to surprise and frustration if not managed properly. Small businesses risk customers abandoning purchases or refusing delivery if they weren’t expecting the added charges. Additionally, higher retail prices may make UK products less competitive versus U.S. domestic goods. In fact, many small UK e-commerce sellers have already needed to raise U.S. prices, a move that can dampen demand.
Despite these challenges, the U.S. remains a lucrative market. The good news is there are concrete steps UK businesses can take to mitigate the risks and continue serving U.S. customers successfully. The next section provides actionable advice to overcome the hurdles.
Key Risks and How to Overcome Them
1. Tariffs and Duties Eroding Your Margins
Risk
New import charges can significantly raise the landed cost of your product in the US, squeezing your margins or forcing you to charge customers more. This could reduce sales if customers find your goods too expensive with the added duty.
How to overcome it
Carefully plan for these costs in your pricing strategy. You might choose to incorporate the average duty into your retail price for the US market or clearly itemize it for customers. Many small businesses are opting for Delivered Duty Paid (DDP) shipping – meaning you, the seller, pay all duties upfront – so that the price the customer sees includes all fees. Major carriers and even postal services now offer “duties paid” options. For example, Royal Mail launched a Postal Delivery Duties Paid (PDDP) service allowing senders to pre-pay duties plus a small handling fee to cover clearance costs. Using DDP eliminates surprise charges for buyers and can improve the customer experience, even if it means the seller absorbs or passes on the duty cost in the product price.
Also take advantage of tools and resources to determine tariff rates. The UK government offers an online “Check How to Export Goods” tool to look up the HS code and applicable U.S. tariff for your product. By classifying products correctly and researching if any preferential rates apply (for instance, under any UK-US trade arrangements or exemptions), you can ensure you’re not overpaying.
2. Heavier Compliance and Paperwork
Risk
The new full customs process means more room for error – an incorrect HS code, a missing origin detail, or an incomplete description can lead to clearance delays or penalties. Small businesses without dedicated logistics teams might feel overwhelmed by the jargon and requirements.
How to overcome it
Educate yourself and get support. Start by reviewing official guidance on export documentation – for example, the UK government outlines what information is needed for US-bound shipments (product description, HS code, precise origin for each item/component). Double-check that your commercial invoices and customs forms are fully filled out. Many online shipping platforms (and carrier websites) now prompt for these extra details – use those tools to guide you. It’s wise to work closely with your logistics providers or a customs broker, especially for the first few shipments under the new rules. Carriers like DHL, UPS, FedEx, etc., have expertise in customs clearance – don’t hesitate to ask them if you’re unsure about any requirement.
3. Shipping Delays and Disruptions
Risk
With more shipments getting stuck in customs, delivery timelines to the US can stretch. Early on, confusion about the rules even caused many postal carriers worldwide (including Royal Mail) to suspend US deliveries temporarily. While operations have resumed, there’s still a risk that your customers could see slower deliveries or tracking statuses showing “awaiting customs clearance” for longer than before. This can lead to customer anxiety and an influx of support queries about “Where is my order?”.
How to overcome it
Set proper expectations with customers. Communication is key during this transition. Update your website’s shipping policy page and checkout notices to reflect that U.S. orders may take a few extra days due to new customs procedures. Encourage U.S. customers to choose tracked shipping options so they can monitor their delivery. If possible, offer a delivery duties paid service (DDP) as mentioned, because shipments with prepaid duties often clear faster (no need to wait for the recipient to pay).
It’s also wise to build in a time buffer for your U.S. deliveries for now. If earlier you promised, say, 5-7 day delivery to the US, consider adjusting it to 7-10 days to be safe, or at least inform buyers of the potential delay. Most customers will understand if you are transparent about the situation (“Due to recent changes in U.S. import laws, parcels may face slight delays in customs. We appreciate your patience.”). Many platforms like eBay and Etsy have already advised sellers to communicate proactively about these changes.
By keeping your buyers informed, you can maintain trust even if shipping is slower. Finally, stay updated: the initial kinks in the system should smooth out over time. Follow news from your carrier (e.g., Royal Mail updates) so you know when services normalize or if any new issues arise and adjust your shipping plans accordingly.
4. Customer Experience and Retention
Risk
U.S. customers may be unaccustomed to paying extra fees for small international orders. A poor experience now (like getting an unexpected bill on a $50 item) could discourage repeat business. There’s also the risk of returns or refused deliveries if the buyer wasn’t aware of the import charges. Overall, the friction introduced by tariffs and delays could harm your brand’s reputation in the U.S. market if not managed well.
How to overcome it
Proactive customer communication and policy adjustments are essential. Make sure your U.S. buyers aren’t caught off guard: clearly state at checkout if prices do or do not include U.S. import duties. If you choose a DDU (Delivery Duty Unpaid) approach – where the customer will be responsible for duties – it’s best to warn them upfront (“Import duties and fees may be due upon delivery”). Better yet, consider shifting to prepaid duties (DDP) as discussed, so the process is seamless for the customer even if it costs a bit more. Many consumers will accept slightly higher product prices over the hassle of paying the carrier separately on delivery.
Use your customer service channels to your advantage. Send a post-purchase email to U.S. customers explaining any new steps (“Your order is on its way! Please note that under new U.S. customs rules, there may be a small import fee required. We’ve done our best to minimize this and make the process easy for you.”). By framing it as a policy change beyond your control (which it is) and highlighting that you’re handling it responsibly, you maintain goodwill. Some UK sellers have even turned this into a marketing message, emphasizing that these charges are government-imposed and not an extra profit for the business. Educating customers can foster understanding.
5. Bulk Import and U.S. Fulfilment
Risk
Relying solely on cross-border parcel shipments exposes small businesses to repeat customs costs, delays, and compliance overhead for every order. As U.S. customs scrutiny increases, this model can become inefficient and costly.
How to overcome it
Consider shifting from direct-to-consumer shipping on each parcel to bulk importing stock into the U.S., then fulfilling orders domestically. This model spreads the customs clearance costs across a larger shipment, reduces per-unit duty and handling fees, and can dramatically improve delivery speed for U.S. customers. There are a few ways small UK businesses can make this work:
- Third-party logistics (3PL) providers: Companies like ShipBob, ShipMonk, or even Amazon FBA allow UK exporters to send pallets or containers into a U.S. warehouse. Once cleared, orders are shipped within the U.S. at local rates and speeds.
- Fulfilment centres: Specialist fulfilment firms can store your goods in the U.S. and handle pick, pack, and ship on demand. Many integrate directly with Shopify, WooCommerce, and other e-commerce platforms.
- Hybrid models: For smaller volumes, you could bulk ship less frequently (e.g., monthly) into a U.S. partner’s warehouse, then fulfil customer orders from there.
While this approach requires more planning, upfront logistics spend, and possibly a shift in how you manage inventory, the pay-off is faster shipping, fewer surprise charges at delivery, and a smoother customer experience. It also opens the door to easier returns handling (customers can return domestically rather than internationally).
For businesses with steady U.S. demand, bulk import and fulfilment from within the U.S. may actually save money and protect margins compared to repeated cross-border parcel shipping under the new regime.