US Suspends Duty-Free De Minimis Rule: What It Means for T&T SMEs and Exporters

On July 30, 2025, the United States government issued an Executive Order titled “Suspending Duty-Free De Minimis Treatment for All Countries”, effectively removing the US$800 duty-free exemption on imported goods. This policy change, which came into effect on August 29, 2025, has far-reaching implications for global exporters—including Trinidad and Tobago’s small and medium-sized enterprises (SMEs) that rely heavily on international sales.

Previously, goods valued at US$800 or less entered the US duty-free, a provision that fueled the growth of e-commerce exports from developing economies. With the suspension in place, all international postal shipments to the US are now subject to customs duties, regardless of value.

Impact on Trinidad and Tobago’s SMEs

For many SMEs in Trinidad and Tobago, this sudden change has disrupted operations and created uncertainty. Businesses in handicrafts, jewelry, clothing and accessories, specialty foods, sauces, cocoa, and chocolates have especially felt the pinch. These sectors thrived during the pandemic by embracing e-commerce platforms to access overseas buyers—especially in the US, which remains their largest export market.

However, the suspension has forced businesses to reconsider how they fulfill orders:

• Postal exports disrupted: The national postal operator, a key channel for small exporters, can no longer deliver to US buyers under the duty-free exemption.
  
  

• Private courier reliance: SMEs are being pushed to use DHL, FedEx, and UPS, where shipping fees are significantly higher. These costs erode already thin profit margins.
  
  

• Customer dissatisfaction: Delays, cancellations, and refund requests are becoming common, leading to loss of credibility and reputation in competitive e-commerce markets.
  
  

Financial Strain and Export Viability

Exporting is already challenging for SMEs due to high operational costs, fluctuating exchange rates, and global competition. Now, with this suspension:

• Sellers must either absorb courier costs, reducing profitability, or pass them onto customers, which risks lost sales.
  
  

• Orders are delayed, frustrating international customers accustomed to low-cost and timely deliveries.
  
  

• Some businesses may be forced to halt sales to the US temporarily, sacrificing revenue and hard-earned brand loyalty.
  
  

In the bigger picture, while the macroeconomic impact on T&T’s economy may appear modest, the direct hit to SME revenues reduces corporate taxes, lowers foreign exchange earnings, and may push businesses toward riskier ways of accessing foreign currency to cover costs.

Adapting to the New Export Environment

Exporters must now adjust their approach to maintain US market access. One practical option is switching to the Delivered Duty Paid (DDP) shipping model. Under DDP, the seller pays duties and taxes upfront, and the final product price reflects these costs.

While this makes products appear more expensive to US buyers, it:

• Prevents “surprise charges” upon delivery.
  
  

• Protects the seller’s credibility and brand reputation.
  
  

• Provides customers with a transparent, all-inclusive price, improving trust and repeat purchases.
  
  

To stay competitive, SMEs should:

1. Recalculate pricing models to include courier and customs duty costs.
   
   

2. Communicate clearly with customers about shipping and duties to avoid confusion.
   
   

3. Explore strategic partnerships with courier companies to negotiate lower bulk shipping rates.
   
   

4. Seek government and chamber of commerce support for advocacy and possible relief measures.
   
   

The Road Ahead

The suspension of the US duty-free de minimis rule is a major setback for T&T’s SMEs, but it also highlights the need for resilient export strategies. Whether temporary or prolonged, this policy shift demands adaptability. Businesses that can successfully adjust their logistics, pricing, and customer engagement will be better positioned to weather this disruption.

For now, exporters must carefully balance cost management and customer satisfaction to preserve their hard-earned presence in the lucrative US market.

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