Cabo Verde Impacted as U.S. Ends Tariff Exemptions on Small Packages, Disrupting Global Trade

In a significant development in international postal logistics, the government of Donald Trump in the United States has put an end to tariff exemptions on small packages valued at under $800. This move marks a departure from a long-standing exemption created in 1938, introducing a new era of tariff charges on packages, irrespective of their value, origin, or mode of transportation, as announced in a decree signed on July 30.

As per the Customs and Border Protection (CBP) in the U.S., previous exemptions allowed such packages to enter the country without tariffs. However, this policy shift is seen as an effort to curb the influx of narcotics, counterfeit goods, and other prohibited items. The CBP reported that 98% of narcotics and 97% of counterfeit goods intercepted came through these small packages in 2024 alone. Consequently, the new regulation will impose tariff rates starting at 10%, with rates reaching as high as 50% for imports from countries like Brazil and India. Only personal gifts valued under $100 will remain sheltered from this taxation.

The termination of these exemptions has led to operational disruptions across global postal services. The Universal Postal Union (UPU) of the United Nations has confirmed that postal operators from at least 25 member countries, including key players like Germany, France, Italy, and Japan, have temporarily halted services to the United States due to logistical uncertainties surrounding the implementation of the new regulations. Sources from international postal services have indicated concerns about the technical details necessary to accommodate the changes mandated by the U.S. customs authorities, complicating the ability to levy tariffs from senders before reaching the CBP.

The Trump administration's decision stems from an exponential increase in the volume of small packages, rising from 134 million units in 2015 to more than 1.36 billion in 2024, a figure that relates heavily to the burgeoning use of e-commerce platforms like Temu and Shein. The previous administration under Joe Biden had already begun scrutinizing this influx. Now, by enforcing tariffs on packages previously exempt, the administration aims to tighten control over imports, although the move poses significant challenges for small businesses and international postal services.

Affected countries have expressed a temporary suspension of postal deliveries to the U.S. as they work to absorb the ramifications of these abrupt changes. The CBP has issued guidelines commencing August 29, wherein postal services and businesses can choose to apply a fixed rate per package during a six-month transitional phase.

Critics argue these changes could adversely impact international e-commerce, particularly for small-to-medium enterprises that rely on the cross-border trade of low-value goods. Retailers like Elizabeth Nieburg in the UK, which allocates a significant portion of their sales to American customers, have had to halt shipments, citing potential price increases that would strain their business margins.

In response to operational challenges and tariffs, many smaller enterprises are forced to reassess their business models drastically. Companies heavily dependent on shipping goods to American consumers are anticipating increased logistics costs and are contemplating shifts in supply chain strategies to mitigate impacts.

The broader geopolitical implications of this policy change have led some to speculate on potential shifts in trade relationships. Analysts predict that the strain on transatlantic trade, particularly in the realm of small-value goods, could see longer-term shifts in how global supply chains are managed and optimized.

Emerging economies, especially those with significant exports to the U.S., might soon explore new strategies or bilateral agreements to forestall the economic implications brought about by this sudden regulatory shift. As countries and corporations navigate this complex landscape, the reverberations of this U.S. policy alteration are likely to be felt across various sectors and regions.