When the United States quietly killed its $800 de minimis threshold in August 2025, few outside the e commerce world took much notice. But for thousands of small and mid-sized exporters in the UK and EU, the impact was anything but quiet. Now there are moves to do the same in the UK and the EU. Nick Hoare, Director and Co-founder at Prolog Fulfilment explains.
Changes started in the US
For decades, the concept of de minimis — the idea that low-value imports don’t warrant the full force of customs and tax bureaucracy — has underpinned global e-commerce. It has greased the wheels of trade, allowing small parcels to cross borders without duties or VAT. In the US it was a lifeline for independent brands, e-commerce startups, and artisans reaching American customers through Etsy, Shopify, Amazon, or even their own websites. Now, with the threshold gone, every commercial shipment — no matter how small — must wade through full customs procedures, tariff payments, and compliance red tape. The result has been complex, costly and confusing and in some cases has resulted in products simply being thrown away because no conclusive way forward could be found.
Larger players — with fulfilment centres inside the U.S. and full customs infrastructure — have had an easier ride but the change has hit small and medium sized businesses hard. As these businesses are still struggling to navigate these changes it seems that the de minimis exemption in the UK and the EU is now in the crosshairs.
The UK and US are next
In the UK, a £135 threshold for customs duties has come under fire from domestic retailers, who accuse it of enabling a flood of ultra-cheap imports from China and elsewhere. The Labour government, positioning itself as both pro-business and fiscally responsible, has made clear that this regime is under review. Chancellor Rachel Reeves has indicated openness to closing what’s being labelled a “loophole”— framing it as a fairness issue for British companies.
Across the Channel, the EU has already scrapped the VAT de minimis threshold and now proposes abolishing the customs duty exemption entirely by 2028. A small parcel fee is also on the table, with the European Commission pushing for tougher enforcement against undervalued goods and tax avoidance through under-declaration.
The risk of collateral damage
Supporters argue that de minimis rules have long distorted competition — giving non-EU and non-UK sellers a price advantage, evading scrutiny on product safety, and hollowing out domestic retail. But while policymakers pursue fairness, they risk collateral damage: the small businesses that rely on low-friction imports and the consumers accustomed to affordable cross-border purchases.
For SMEs, the administrative burden of full customs declarations, VAT compliance, and platform-level tax collection may be too much to absorb — especially when margins are already under pressure. The result may be that only the largest players can afford to trade across borders, and innovation gets buried under paperwork. Are we witnessing the slow dismantling of a system that once enabled global e-commerce to flourish.
Looking ahead
These changes raise some difficult questions: What happens to small business globalization when the costs of compliance outweigh the benefits of selling abroad? Will digital-first exporters be forced into domestic silos, their growth ambitions buried under customs forms? If we care about keeping trade open and inclusive, do we need to rethink how we support the smallest players.
Significant uncertainties remain, particularly regarding the finer points of implementation. For instance, there is still no formal guidance on requirements for postal shipments, nor clarity on who will be responsible for duty collection and at which stage of the process. Questions also persist around the treatment of mixed-origin parcels and how they will be classified. Equally uncertain is consumer
response: it remains to be seen whether domestic shoppers will absorb potential price increases to continue accessing international products or shift their demand toward more affordable domestic alternatives.
Supporting our brands
The UK and EU seem to be moving toward reducing or removing de minimis exemption for at least some categories of goods or lowering thresholds. At Prolog our teams are working diligently behind the scenes—collaborating closely with our partners and customs specialists, to obtain clear, actionable insights as
swiftly as possible. In the face of ongoing uncertainty and challenges ahead, our priority remains unwavering: to support our customers with cost-effective logistics solutions that minimise disruption and maximise value.
