The end of the U.S. de minimis exemption is shaking up global parcel trade and raising costs for online retailers. This increase in prices will be monitored closely. Postal services from Europe and Asia are stopping or slowing shipments to the U.S. The de minimis tariff exemption, which let goods valued at $800 or less enter the country duty-free, has ended. This change, which started on August 29, also affected previous exemptions for Chinese parcels. Over 16 European postal services, like Royal Mail and Deutsche Post, along with Asian carriers such as Japan Post, have delayed or limited deliveries due to unclear U.S. Customs guidelines and a lack of time to comply.

Impact On Parcel Disruptions

This situation threatens the flow of millions of small packages, including gifts and e-commerce orders. Last year, 1.3 billion packages entered the U.S. under the de minimis rule, with about 60% coming from China. Discount retailers like Shein and Temu are facing huge cost increases since their operations relied on these exemptions. With the end of the U.S. de minimis rule on August 29, 2025, we expect significant market volatility. The sudden halt in shipments from at least 16 European postal services and several major Asian carriers brings immediate uncertainty. It may be wise to consider protective measures, such as buying call options on the VIX, as the market reacts to this logistical disruption. There is a clear opportunity for a pairs trade between e-commerce and traditional retail. Companies like Shein and Temu, which relied on the tariff exemption, will experience sudden cost hikes and shipping problems. We should explore bearish positions on these online retailers while looking at bullish positions on U.S. companies that will gain from reduced foreign competition.

Market Impact And Strategy

The logistics sector is now divided into winners and losers. We expect carriers like FedEx and UPS, which have strong customs brokerage systems, to gain market share from suspended national postal services. The market reflects this expectation, with FDX shares rising nearly 1% in pre-market trading, indicating that they will manage the rerouted volume. This disruption will contribute to inflation since the cost of importing goods into the U.S. is about to rise. Last year’s figures show that over 1.3 billion packages fell under the de minimis rule, highlighting the scale of this change. We are looking back at supply chain issues from 2021 and 2022 as a reference for how this could impact consumer spending. Historically, the 2018-2019 tariff increases showed that initial market reactions can be intense before supply chains adapt. With U.S. Customs yet to provide clear guidance, disruptions in global shipping could last for weeks instead of days. We will closely monitor shipping manifests and U.S. import data for signs of recovery or further decline. Create your live VT Markets account and start trading now.

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