Navigating US tariff changes: What Australian retailers need to know

What's happened

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Last updated: May 6, 2025

To date, the Trump administration has enacted significant trade policy shifts, focusing on tariffs, national security investigations, and stricter trade enforcement.

As of May, we've seen the following announcements which will impact Australian retailers:

• Tariff rates
  • De minimis exemption removed: No longer applies to shipments under US$800 from China and Hong Kong.
  • New tariff rate of up to 145% (125% reciprocal tariffs plus 20% baseline tariffs)
• Customs entry requirements
  • U.S. Customs and Border Protection have paused enforcement of stricter formal entry for goods over US$250. Shipments up to US$2,500 can still use simpler informal entry procedures and carriers have resumed B2C shipping, though some transit delays may occur due to clearance backlogs.
    For the latest, our cross-border shipping partner Zonos, also offers a summary of newly announced and pending tariffs that affect retailers, along with their current status.

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Elimination of de minimis for Chinese imports

Previously, the US de minimis threshold of $800 USD allowed low-value goods to enter duty free. With its removal, all goods manufactured in China or Hong Kong are now subject to duties and taxes when they land in the United States.

This decision affects Australian retailers whose goods are made in China, even if they are shipped from Australia and means higher costs for Australian retailers that manufacture in China and sell to US customers. For example, a US$100 retail-priced clothing item that was duty-free before could now attract over US$35 in duties. Alternatively, retailers could import stock into the US and pay duty on the cost price instead of the retail price, but this requires holding inventory in the United States, adding complexity.
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What retailers need to consider now‍

In the short-term, retailers need to decide how they will handle these additional duties and taxes. The key options include:

1. Continue shipping Delivery Duty Unpaid (DDU): This means customers will bear the cost of duties and taxes upon delivery. While this may maintain lower upfront costs for retailers, it risks refunds, returns, and customer dissatisfaction as U.S. consumers adjust to the new fees.
   
   
2. Shift to Delivery Duty Paid (DDP): Retailers can pre-pay duties and taxes so that shipments clear customs in transit and reach consumers seamlessly. This ensures a smoother delivery experience but requires strategic adjustments. Merchants can either display duty and tax calculations at checkout or absorb the costs within product pricing or shipping charges. In the short-term, a weak Australian dollar may also soften pricing changes and increase international competitiveness for Australian retailers.

Even as cost pressures mount, reducing friction at checkout is key. Whether through clear messaging, all-inclusive pricing, or U.S. based fulfilment strategies, retailers that move quickly to adapt will protect both their margins and their customer experience.
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Leading eCommerce players like Shein are already acting to minimise customer friction, with checkout banner stating: “Tariffs are included in the price you pay. You’ll never have to pay extra at delivery.”

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How to ship Delivery Duty Paid (DDP) 

Switching to Delivery Duty Paid (DDP) shipping protects your delivery experience by eliminating unexpected fees that could lead to upset customers, refunds, and returns.

1. Accurate customs classification

In order to get an accurate calculation of duties and taxes you will need to store product categories or Harmonised System (HS) codes in your product catalogue or eCommerce store. This is because HS codes are used to help customs identify the type of items contained within a shipment. Every item should have an HS Code, and the exact code for a specific item will be based on several factors including material composition, physical state (solid, liquid, and gas), use, and whether it is a finished or unfinished item.

Where can I find HS Codes?

It is best to visit your local government website to find the correct HS Codes for your items. Here are some common country links:

• New Zealand - Tariff Finder
• United Kingdom - Trade Tariff Lookup
• United States - Schedule B Search Engine

With the de minimis removal for shipments under US$800 originating from China and Hong Kong, retailers will also need to pass on information about the Country of origin and not just the Shipping origin.

Shipping origin: Refers to where the goods are shipped from. This is the location of the warehouse, supplier, or fulfillment center. Used mostly by carriers and logistics systems for routing and transit purposes.
Country of origin: Refers to where the product was manufactured, produced, or substantially transformed.Important for customs, tariffs, trade agreements, and labeling.

For Australian retailers, carriers will start ensuring that they have the information on your manufacturer's name and address or your Manufacturers Identification Code (MID), to comply with U.S. Customs and Border Protection requirements.  ‍

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2. Automated duty and taxes calculation

Once you have the right information on the product you're shipping, you can use digital tools to accurately calculate the duties and taxes a package will incur, well before it reaches customs. Not only does this reduce bill shock, it also arms you with the information you need to make strategic pricing adjustments and gives you the option to pre-pay duties and taxes, or surface them at checkout for customers (rather than at the point of customs clearance). Using digital tools for duty calculations can also ensure you are always up-to-date with the latest tariff changes.

At Shippit, we partner with tools like Zonos, which allow us to provide a complete breakdown of duties, taxes, and fees based on your product classification. Retailers can pass on their HS codes and product details to the Shippit platform to get an accurate calculation of the sum of duties, taxes, and additional fees from customs, brokers, or the shipping carrier. What's even better is that this service comes with a Landed Cost Guarantee, which ensures you and your customers never pay more than the initial charge.

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3. Automated shipping decisions

In order to scale your international expansion, granular and agile control over your international delivery options is key, so you can adapt to new regions and trade policy changes.

A delivery platform like Shippit offers out-of-the-box rules that can automate tax-related shipping decisions, reducing manual effort, errors, and compliance risks. Here are some tactical examples of how you can leverage our automated delivery allocation: 

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Automate tax handling by destination

• If your products are primarily sourced from China and you are shipping to the U.S., you can auto-apply DDP for all orders that are being delivered to the U.S., in preparation for the elimination of de minimis for Chinese imports.
• For deliveries to other regions, set up an automatic selection of DDP (delivery duty paid) for high-value orders to prevent unexpected customs charges for customers.

Route shipments based on tax efficiency

• You can automatically direct orders to a specific delivery provider that offers the best tax and duty rates.

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To learn more about how you can ship DDP on the Shippit platform, head to our help centre guide.