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If you sell to American customers from the UK, the rules on what your parcels cost to get through US customs have shifted. The de minimis exemption, the threshold that let low-value parcels into the US without duty or formal customs entry, has been cut back. That affects how much duty you pay, what shipping costs, and how competitive your pricing can be.
De minimis sounds like something for your freight forwarder to worry about. It isn't. If a meaningful slice of your revenue comes from US buyers, this change lands directly on your margin, and it's worth understanding properly rather than finding out through a surprise customs bill.
This guide covers what has changed, who it affects most, and what to do about it.
What De Minimis Actually Means
De minimis is Latin for "of minimal importance". In customs law, it's the value below which goods entering a country are exempt from certain import duties and taxes. In practical terms, a parcel arriving in the US below the threshold clears customs without duty or formal entry procedures. Above it, standard duty calculations apply.
That exemption is a big part of why international eCommerce grew the way it did. Parcels under the threshold move quickly and cheaply, which is what makes cross-border selling viable in the first place. Once you're above it, customs costs and processing delays start eating into margins.
For years the US threshold sat at $800 per shipment, generous by international standards. It meant you could send a £600 parcel to a customer in Texas and it would clear as a personal importation, no formal entry, no duty. Most UK sellers built their US pricing on that assumption without ever consciously thinking about it.
What Has Changed
The threshold has been reduced, and significantly. The stated aims are improving tax collection, encouraging domestic production, and trimming the competitive advantage of imported goods.
The exact figure and implementation timeline have moved around as US trade policy has shifted several times in recent years. Some proposals have put the threshold at zero, meaning every import requires formal entry and a duty calculation. Others have suggested intermediate levels around $400 or $600. What hasn't moved is the direction: the exemption is shrinking, it's happening at federal level, and no individual state can override it.
Verify the current rule on the day you're making decisions, because it has changed more than once and may change again.
What It Does to Your Costs
Start with duty itself. Parcels that previously cleared duty-free now attract it, and for most product categories US tariff rates run between 2% and 15%. On a £400 parcel, that's roughly $10 to $60 you didn't budget for, on every shipment.
Then there's formal entry. Anything above the threshold needs proper US customs entry, which means paperwork, processing fees of typically $25 to $100 per shipment, and longer clearance times. Those fees sit on top of the duty, and if you ship any volume they add up quickly.
Carriers are adjusting too. Several have already changed how they handle low-value parcels, and prices are moving upwards. You may need to switch shipping methods or consolidate parcels, which changes your fulfilment model.
The knock-on effects are margin and customer experience. If you compete on price in the US, higher duty comes straight off your profit unless you raise prices, and raising prices costs you sales. And American customers aren't used to paying duty on parcels from established sellers. A surprise charge at the door damages the experience and pushes up returns and complaints.
Who Feels It Most
Not every UK seller takes the same hit.
Ship directly from the UK to US customers and you're in the firing line. Every parcel now carries higher customs costs, so either your pricing accounts for it or your margin absorbs it. If your average order value is under $50, you're hit hardest of all, because your entire margin structure was built around duty-free entry.
Hold stock in the US instead, whether with a third-party logistics provider or through Fulfilment by Amazon, and day-to-day orders are less affected because the goods are already in the country. You'll still feel it when importing stock from the UK, and FBA sellers will see duty costs work their way into fees and effective margins.
It also catches the shipments people forget about. Samples sent to the US and returns coming back can now attract duty too, an easy cost to miss until it appears on an invoice.
At the other end of the scale, premium sellers with average orders of $200 or more have the easiest ride. The duty is a smaller percentage of the price and far easier to fold into it.
Your Options
There's no perfect answer, but there are several sensible responses, and most sellers combine two or three.
The simplest is to reprice. Work out the average duty burden per shipment for your product category, add it to your cost basis, and adjust prices to match. Better still, build duty into pricing from the start rather than treating it as a cost to absorb later. US customers will often accept slightly higher prices from an international seller, especially for products they can't easily buy locally. The risk is pricing yourself out if your customers are price-sensitive, which is why the calculation matters.
The structural fix is US-based fulfilment. Holding inventory with an American 3PL removes per-shipment duty entirely, because the goods are imported once, in bulk. It requires more cash tied up in stock and adds storage costs, but for high-volume sellers the numbers often work.
Then there are the portfolio moves. Shifting your range toward higher-value items gives duty less room to hurt, because better unit economics absorb it more easily. Consolidating several small orders into fewer, larger shipments spreads costs across more units, though it changes your fulfilment workflow. And if the US was only ever marginally profitable for you, the honest option is redirecting that effort toward the EU, the UK or other markets where the maths still works.
Where Automation Actually Helps
Most of this topic is policy, and no software changes what a government decides. But the operational side, working out what each shipment will actually cost you, is exactly the kind of repetitive calculation nobody should be doing manually.
Landed-cost calculation is the obvious candidate. Duty rate by product category, multiplied by declared value, plus entry fees and carrier surcharges, per order or per SKU. An automated workflow can pull your order data, apply current rates, and show you true margin by product without anyone touching a spreadsheet. When rates change, you update them once and every calculation follows.
Duty classification is where AI genuinely earns a mention. Every product needs a tariff code, and classifying hundreds of SKUs from titles and descriptions is slow, error-prone work. AI models are good at suggesting the right classification from a product description, with a person confirming the borderline cases. Beyond that, be sceptical of anyone promising AI will solve your customs strategy. It won't. The decisions in the section above are still yours to make.
Where to Start
Check the current threshold before anything else, because it has moved repeatedly. Then run the numbers on your own US sales: average order value, duty rate for your category, entry fees, and what that does to margin.
If you're still profitable, build the costs into your prices now rather than discovering them on a customs invoice. If you're not, look seriously at US fulfilment or at focusing elsewhere.
Whatever you decide, explain any price changes to customers plainly. Transparency now prevents complaints later.
Which Tools Can Do This?
For the calculation side, landed-cost and duty tools such as Zonos, Avalara and SimplyDuty handle rate lookups and tariff classification. Power Automate (part of Microsoft 365) can pull order data and run margin calculations against your existing spreadsheets, while Make and Zapier connect your store platform to whatever you use for pricing. AI models such as OpenAI, Claude and Gemini help with product classification, and custom API work covers the more complex workflows.
If you'd rather have someone review your US exposure and build the workflows around it, that's what Fulcrum Three does.
We'll work out whether your US strategy still stacks up and what would improve your profitability.
Book a Free Operations Audit →