US Tariff Changes Disrupt International E-commerce
Small businesses across the United Kingdom and other countries are facing significant challenges as the crucial holiday shopping season begins, following the United States' decision to eliminate a key tariff exemption. The so-called "de minimis" exemption, which allowed imports valued under $800 to enter the US tariff-free, was revoked on August 29, creating unexpected costs and complications for international sellers and their American customers.
Small Business Stories: From Yarn to Stationery
Kim Doherty, who operates Fleece & Harmony woolen mill and yarn shop in Belfast, Prince Edward Island, Canada, has seen her shipping costs to US customers nearly double. What was once a straightforward process for sending yarn skeins across the border has become financially burdensome. A single $21 ball of yarn now incurs $12 to $15 in brokerage fees from UPS, plus state taxes and a 6.5% tariff.
"We had orders that have reached the customers and they're in shock about the fact that they have to pay," Doherty explained. "And it's amazing how many people really didn't know what the impact was going to be."
Martha Keith, founder of London-based stationery brand Martha Brook, has experienced a 30% year-over-year decline in US sales despite absorbing the import taxes and customs fees herself. Her Etsy store, which serves as her primary e-commerce channel alongside her own website, had seen US sales increase by 50% earlier in the year before the exemption ended.
"The issue seems to be in customer confidence hitting the desire to order from businesses outside of the US," Keith noted. The situation has created particular difficulties with her £109 stationery advent calendars, where shipping and tariffs will cost an additional £25 per unit, requiring her to find £5,000 extra to cover already-sold products.
Broader Impact and Business Adaptations
The policy change, intended to combat drug trafficking and limit low-quality goods from discount sellers like Temu and Shein, has had unintended consequences for legitimate small businesses. American shoppers like Chad Lundquist from Fort Lauderdale, Florida, have found themselves surprised by unexpected charges. Lundquist paid a $10.80 tariff bill from FedEx for a $27 fragrance oil purchase from Toronto-based Oil Perfumery.
Businesses are employing various strategies to cope with the new reality. Some, like Digi Wildflowers, an Etsy shop selling embroidered baby blankets and custom quilts from Windsor, Ontario, have chosen to absorb the costs themselves. After adding a prominent banner stating "US Import Duties On Us," their sales began to recover.
Other businesses are diversifying their markets. Selene Pierangelini of Brisbane-based Apricot Rain Creations, which sells crystals and spiritual wellness products, has seen her US sales drop from 85% to 35% of total revenue. She has responded by restarting European sales and exploring US-based print-on-demand services.
Some international postal services, including Australia Post, temporarily suspended deliveries to the US due to confusion around the new regulations, forcing businesses to switch to more expensive private carriers like FedEx and UPS.
As Kim Doherty summarised the sentiment of many small business owners: "I'm pretty sure that my US customers were shopping and not even thinking about it, but now they'll be evaluating the purchases that they're making, knowing that they are going to have the extra fees on top of whatever they see."
