A shipping loophole exempting small-value packages from tariffs ended at 12:01 a.m. Friday, meaning that packages shipped into the U.S. under $800 are now subject to additional taxes.
Earlier this year, President Donald Trump ended the loophole for small-value packages shipped from China and Hong Kong.
Senior White House officials hailed the move in a call with reporters Thursday, saying that it was a crucial step in Trump's efforts to rebalance trade and also will help crack down on the importation of illegal goods, including fentanyl.
Peter Navarro, senior counselor to the president for trade and manufacturing, said ending the "deadly de minimis loophole" will add up to $10 billion in tariff revenues and help "save thousands of American lives by restricting the flow of narcotics and other dangerous and prohibited items."
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A senior administration official laid out how the change will work: Small-dollar packages brought into the U.S. will be subject to the tariff rate of their country of origin (also called the ad valorem rate).
However, aiming to ensure a smooth transition, the administration said it is creating a six-month option where shippers can instead pay between $80 to $200 per item as a flat fee, depending on the country of origin's tariff rate.
There remain concerns about the logistics of ending the loophole, but the Trump administration said that major shipping companies are prepared for the change.
Ahead of the change, UPS, FedEx and DHL have all said they will continue to ship to the U.S. after the "de minimis" tariff exemption expires.
When asked whether consumers could see any snags as this new policy is implemented, a senior administration official eschewed those concerns, saying that the U.S. gave shipping companies around the globe ample notice.
The senior administration official said small packages have become "really deadly smuggling devices."
Overall, a majority of goods seized over infractions involving violations of intellectual property or for health and safety reasons, such as shipped weapons parts, involve small-value packages, according to a senior administration official.
Navarro said foreign postal services need to get "their act together" when it comes to policing packages coming into the U.S., saying they are "vastly underperforming" express carriers like FedEx, UPS and DHL.
When asked whether there was enough staffing at U.S. Customs and Border Patrol to handle the change, another senior administration official said that officers "stand ready."
