Tariff Exemption Expiration Impacting Consumers
Consumers in the United States have enjoyed shopping internationally without incurring customs duties on packages valued at $800 or less. However, this convenience is set to change. On Friday, the U.S. will remove a tariff exemption that has allowed such imports to enter the country without tax. As a result, shipments will soon face charges ranging from 10% to 50% of their declared values or a flat fee of $80 to $200 for six months.
“Consumers are going to be shocked,” stated Alison Layfield, vice president of product development at ePost Global, an international shipping and logistics provider. “They are going to end up, I think, (with) sticker shock, or somewhere along the way, they’re going to see that extra cost.”
While not all customers will be responsible for the full customs charges associated with their orders, the responsibility will vary based on where they shop, the products they purchase, and how much of the cost retailers choose to absorb. Confusion surrounding the new duties may lead to delays and complications, as expressed by foreign postal services, private shippers, and merchants.
Key Considerations for Online Shopping
To navigate the upcoming changes and avoid unexpected customs fees, consumers should keep the following factors in mind:
1. Identify the Product’s Origin
Determining where a product is made can be straightforward yet challenging online. Consumers should diligently explore product descriptions to find the country of origin. Once located, buyers can research the applicable U.S. tariff rates for that country to better anticipate import costs or check if the seller states any tariff duties at checkout.
2. Know Who Bears the Duty
Shoppers should verify who is responsible for customs charges upon delivery. Terms such as “delivered duty paid” indicate that the vendor will cover import taxes and handle the necessary paperwork, though they may adjust prices accordingly. Conversely, if the duty status is labeled as “delivered duty unpaid,” the responsibility for customs fees falls to the buyer.
3. Understand Order Fulfillment
Another way to avoid import taxes is to confirm whether the product is being shipped from a U.S. warehouse. Checking for a “ships from” note in the product details will indicate where the item is packaged and dispatched from. For instance, eBay users can filter search results to show only products that ship from within the U.S. Brands based abroad should clarify if items will be packaged and shipped from the United States.
4. Customs Processing Procedures
Upon arrival in the U.S., packages first pass through a customs clearinghouse, where an agent examines the digitized Harmonized System (HS) code on the customs declaration. This code is an internationally recognized standard used to categorize goods and determine duties. For packages shipped through international postal services like the U.S. Postal Service, if customs fees apply, consumers may need to settle these charges at the time of delivery or pickup. In contrast, courier services such as DHL, FedEx, and UPS typically invoice customers or request payment upon delivery.
5. Addressing Unexpected Customs Charges
To mitigate customer dissatisfaction resulting from surprise customs bills, sellers and shippers are motivated to clarify associated costs. Unfortunately, consumers have limited recourse if confronted with unanticipated duties. If a customer believes the charge is incorrect, they can dispute it; alternatively, they may opt to refuse delivery, though a refund may not be guaranteed.
