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A Big Apple Perspective on Trade Changes

De Minimis and the Tariff Tango

LONDON >> So the U.S. decided to shake things up. The “de minimis” exemption—those neat duty-free deals for parcels under $800 from China or Hong Kong—is over. Now, slapped on those goods are tariffs hitting a whopping 145% post-Trump’s latest move. Talk about a plot twist that left global trade spinning, and Beijing’s got a whole new dance card in response.

Retailers Retreating

We’re seeing some players pull back—Space NK is one of them. They’ve hit pause on sending their beauty products stateside. Why? They’re dodging any sticky tariff situations for their customers. Similarly, Understance from Vancouver hit the brakes on U.S. shipments via Instagram. They’re eyeing more clarity before they rev back up.

Cindy Allen from Trade Force Multiplier puts it best: “From zero to 145% is untenable.” For many small and medium businesses, it’s too hot to handle. Some are exiting the stage altogether.

Price Tags Climbing South of Houston

Those trying to hang onto U.S. customers are hiking prices. Oh Polly, a British retailer, raised its U.S. prices by 20%. More hikes might come, says their managing director, Mike Branney. Singapore’s Shein is trying to reassure fans on Instagram that while prices might wobble, most collections still stay budget-friendly. But whispers say they’ve slashed U.S. ad spend, anticipating sales turbulence.

Over at Temu, there’s a focus on U.S. warehouse goods labeled ‘Local.’ They promise no extra import charges. However, as pre-now inventory dwindles, their strategy could face hiccups.

From Duty-Free to Accounting Headaches

The de minimis rule started as a trade smoothener. But critics say it’s been a funnel for counterfeit goods and smuggling. By the numbers, a whopping 97% of intellectual property infringement seizures by Customs and Border Protection involved such shipments. UPS’s Carol Tome mentions that many clients source entirely from China. U.S. marketplace Etsy is nudging sellers to clarify product origins to dodge mix-ups.

Winners Amidst the Chaos

With e-commerce taking a hit, the old-school retail approach might see light. Take Primark—only selling in U.S. stores, not online; they could thrive. George Weston from Associated British Foods suggests maybe Americans will revisit shopping centers for deals.

Hugo Pakula, CEO at Tru Identity, calls it a “seismic shift.” If your goods aren’t in U.S. warehouses yet, expect to feel the heat.

In Summary

Pull up a chair and grab some popcorn; this trade flick is far from over. As prices rise and strategies pivot, retailers are navigating a tricky new landscape. What’s next on the urban economic billboard? Stay tuned.

Additional reporting by Amy Tennery, Lisa Baertlein, James Davey.