While the end of de minimis tariff exemptions for exports to the US are expected to hit Asian manufacturing countries hard, a new study of search traffic shows that UK businesses are worried too. The move will impact online fashion retailers, marketplace sellers and direct-to-consumer (DTC) brands.
Shutterstock
The change to the rules on 29 August means low-value parcels (less than $800) are no longer exempt from fees when entering the American market, and new data shows UK searches for ‘Trump Tariffs’ rose 90% in late August as fashion brands raced to respond.
That’s according to new analysis by retail tech communications provider Flagship.
The changes were announced by the US administration just over a month ago, leaving exporters with little time to prepare. They mean retailers now face reciprocal US tariffs on low-value parcels or flat-fees of between $80 and $200 per shipment for the first six months.
Searches for ‘de minimis rule’ also spiked week-on-week on Friday, up 52.5% on Google Trends ahead of the policy change.
And keyword searches for ‘US tariffs’ climbed 1 index point week-on-week and 15 index points week-on-two-weeks (that is, up 78.9%) before the de minimis rule ended last Friday.
Flagship said UK brands will be among the most impacted exporters following the trade policy change as last year, 41 million de minimis shipments came from the UK, the fourth largest shipper of small parcels to the US.
China is the biggest with 944 million shipments, followed by Canada on 98 million and Mexico on 94 million. Given China’s position as the ‘manufacturer to the world’ and Canada and Mexico’s proximity to the US, the top three is hardly a shock. But the UK’s fourth place is perhaps more surprising.
But Flagship cited Retail Economics data showing that 76% of UK exporters are now diversifying beyond the US, with many turning to territories in MENA, including the UAE, to tap new cross-border growth potential.
While a US Court of Appeals ruling on Friday challenged the legality of the tariffs, retailers could still face further uncertainty and potential disruption pending a likely review by the Supreme Court later in the year.
