How U.S. Tariffs Affect Cross-border Thrift Sales

Update: On Friday, February 7, the United States temporarily postponed the suspension of the de minimis provision. This allows smaller sellers to resume sending packages to the U.S. without additional duty or tariff (regardless of country of manufacture), as long as the value of the goods is less than $800.

Effective early today, February 4, the United States implemented a 10% tariff on all Chinese imports. Worse, goods shipped from any country into the United States that were manufactured in China are now subject to formal customs entry. This is because the Section 321 de minimis exemption, which allowed duty-free entry for shipments valued at under $800, has been terminated for any items manufactured in China. This includes clothing, and it immediately affects both buyers of secondhand clothing in the U.S. as well as anyone sending goods to U.S. buyers. Anything manufactured in China now requires formal customs entry into the U.S., with duties ranging from 10% to 30%.

Impact to U.S. Consumers

The removal of the de minimis exemption means that any items U.S. customers order from international sellers will be subject to tariffs. This new requirement will mean slower international shipments and higher costs. The availability of goods is also likely to be affected, as many sellers will reduce or halt shipments due to the increased costs and complexities involved with selling to U.S. customers.

For now, American consumers may be best served by either purchasing items not manufactured in China, buying Chinese products from U.S. sellers only, or waiting for the tariff situation to change.

Challenges for Canadian Sellers

Sellers of secondhand clothing and accessories based in Canada will now face increased scrutiny and costs for anything shipped to the United States. Here’s related guidance provide by Stallion Express, a popular cross-border shipping vendor in Canada:

What This Means for Your Shipments

• Made-in-China products (including Hong Kong) now require formal entry, which means all such shipments must go through customs clearance and will be subject to 10-30% duties and tariffs.
• For shipments we received on February 3 and 4, we are actively working with our partnered broker to clear all affected shipments via formal entry. Duties and taxes will be levied on these shipments and will be passed on to your account.
• Expect a 1-2 day delay for shipments received on these dates as they go through the new customs clearance process.

Action Required

• If you’ve shipped with us this week, and if your shipments are sourced from a country other than China or Hong Kong, please reply to this email with proof of country of origin (such as a commercial invoice or manufacturer documentation). If verified, we may still be able to clear your shipments tariff-free.
• Going forward, since made-in-China goods now require formal entry, we are swiftly developing a new feature on our platform that will allow you to declare the country of origin of your shipments and provide necessary customs details (such as HTS codes) for clearance. More information will be shared as soon as this feature is released.

As the situation is evolving quickly, check with your local shipping provider for advice on how to move forward. Assume that for now, any shipments you send to the U.S. will require you to provide proof of the country of origin (photos of clothing tags showing manufacturing location will help) and the correct Harmonized Tariff Schedule codes. For used clothing, this is likely code 6309.00.0010. Note that the new rules requiring small sellers to prove country of origin applies to all packages, not just items made in China; sellers are also obligated to prove items did not originate from China.

For many Canadian sellers, the extra time and expense involved in shipping items to U.S. customers simply may not be worth it. If you are a Poshmark US vendor based in Canada, this article will help you put your closet on vacation mode.

Strategies for Canadian sellers

If you choose to continue selling to American customers, here are some tips to help you succeed during this time of uncertainty and beyond:

• Maintain thorough records of the country of origin for all products you send to the United States.
• Consider absorbing some of the extra costs to stay competitive with other sellers.
• Stay updated on the situation through your local cross-border shipping service, government websites and news sources.
• Consider expanding and selling to countries other than the U.S.

Conclusion

The recent U.S. tariff changes present significant challenges on very short notice to both consumers and sellers in the secondhand clothing market. U.S. buyers are likely to see higher prices and potential delays from international sellers, while international sellers will face increased admin requirements and expenses. By adapting your buying and strategies accordingly, and staying up to date as things evolve, we can all find an effective way forward in this evolving landscape of online thrift shopping.