Australian small businesses that sell to the US are facing a major export headache, with Australia Post suspending most parcel deliveries to America and Puerto Rico after the US moved to scrap duty-free concessions on imports under US $800.

From 29 August, all goods entering the US, no matter how small, will attract tariffs and duties. That means Australian retailers who once shipped straight to US customers without extra costs will now need to navigate a thicket of new customs rules.

The shake-up comes off the back of US President Donald Trump’s overhaul of import settings, which has ended the long-standing “de minimis” exemption.

Previously, Aussie retailers could send goods worth up to US $800 duty-free. Now, even low-value parcels face charges of between US $80 and $200, depending on the product category and country of origin.

Tariff situation adds a layer of complexity

Australia Post said it needed to temporarily suspend US parcel services while it works on a solution. Letters, documents and gifts under US $100 (about AU $150) are still being delivered.

Gary Starr, Executive General Manager at Australia Post, explained to The Guardian that the situation is complex.

“We are disappointed we have had to take this action; however, due to the complex and rapidly evolving situation, a temporary partial suspension has been necessary to allow us to develop and implement a workable solution for our customers.”

For Aussie exporters, particularly in eCommerce, fashion and lifestyle products, the halt has been immediate and costly.

Some retailers told SmartCompany they’ve had to pull the pin on US sales entirely, while others are scrambling to set up US-based warehouses or third-party fulfilment centres to keep goods moving.

FedEx, which continues to operate into the US, says it’s “working closely with customers to ensure they can comply with the new requirements”.

A spokesperson suggested the changes would “add complexity and cost” but stressed the company had systems in place to handle the transition.

Small businesses feeling the pain

The Albanese government has described the US policy shift as “disappointing” and warned it will drive up costs for American consumers as well as Australian exporters. An Australian government spokesperson told The Guardian the move “adds another layer of red tape” for small businesses already managing tight margins.

It’s not just Aussie businesses feeling the pain. Postal services across Europe, Japan, Singapore and South Korea have also suspended or restricted US-bound parcels while they figure out how to handle the new duties.

So, what now for small business exporters?

Probably the best option for exporters is to hold off on shipping until Australia Post finalises a workaround. The alternative is to switch to private couriers, such as FedEx, DHL, or UPS, which are still delivering to the US, albeit at a higher cost. Or maybe it’s time to explore US-based fulfilment partners to sidestep the tariff shock and keep products flowing to American customers.

Regardless of the approach that business owners decide to take, they should ensure they keep customers in the loop about possible delays or extra costs. Failing to do so could result in reputational damage, which is always bad for business.

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