Trump Administration's Tariff Policy Causes 81% Drop in U.S. Postal Traffic

What's Happening?

The Trump administration's decision to end the de minimis exemption, which allowed goods valued at $800 or less to enter the United States duty-free, has led to a significant decline in global postal traffic to the U.S. According to the Universal Postal Union (UPU), postal traffic dropped by 81% on August 29, 2025, compared to the previous Friday. The exemption's expiration means that low-value parcels are now subject to tariffs ranging from 10% to 50%, or a flat rate of $80 to $200, depending on the merchant's choice. This change has caused major operational disruptions, with 88 postal operators, including those from Germany, France, and Mexico, suspending some or all services to the U.S. The UPU is working on a tool to help postal operators calculate taxes owed on packages to mitigate the disruption.

Why It's Important?

The removal of the de minimis exemption is part of the Trump administration's broader strategy to reduce the U.S. trade deficit by imposing tariffs on trading partners. This policy shift has created uncertainty for small businesses and consumers, as many overseas suppliers are hesitant to ship goods to the U.S. until the cost burden is clarified. The disruption in postal services could have significant economic implications, affecting international trade and potentially leading to increased costs for U.S. consumers. The swift implementation of the rule has also led to confusion among postal operators and businesses, highlighting the challenges of adapting to new trade policies.

What's Next?

The UPU is introducing a landed-cost calculator to assist postal operators in determining the taxes owed on packages at their origin, which may help resume postal traffic to the U.S. However, the long-term impact on international trade and the U.S. economy remains uncertain. Stakeholders, including businesses and consumers, will be closely monitoring the situation to understand the full implications of the policy change. The U.S. government may face pressure to provide clearer guidance and support to mitigate the operational disruptions caused by the new tariff rules.