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Louise Verity says she has been “completely winging it” after the removal of a longstanding exemption from customs duties for goods sent from the UK to consumers in the United States.
The founder of Bookishly, which sells literary-themed gifts and is based in Northampton, estimates that 60 to 70 per cent of her sales are generated in the US, largely from independent bookshops. She has observed a “real decline” in orders since August 29, when the rules changed.
The “de minimis” threshold allowed shipments worth less than $800 to enter the US without having to pay duties or provide detailed customs paperwork. Initially planned for removal in 2027, President Trump shortened the timeline through an executive order in July.
Tina McKenzie, policy chair of the Federation of Small Businesses, said the impact of the change, as well as other tariffs introduced this year, meant just over one in five small exporters have decided to stop or may stop shipping to the US altogether.
“Entrepreneurs who sell into the US don’t have the same resources big companies do to absorb new red tape, sudden tariff changes or service suspensions. What they need are fewer barriers to trade, not more,” she said. She called for the UK government to triple the tax-free annual trading allowance to £3,000 to make it easier for small businesses to sell more.
Several weeks on from the removal of the exemption bills are coming into exporters from shipping companies such as Royal Mail and DHL. Small businesses that use a “duties paid” service, where duties are calculated at the US border, have to cough up. Others are making their customers pay on receipt. A third group is muddling through as best they can.
“We’re just completely winging it,” admits Verity. “We are trying to make the best decision that we can, and trying not to lose our customers. To Americans, this is new, so it feels bad, they are paying something they weren’t before.”
A Bookishly bag for the American market, shipped there from Northampton
YESHEN VENEMA
Bookishly offers a monthly book subscription, which was previously sent to the US through Royal Mail as a large letter. However, large letters are not included in the Royal Mail’s “duties paid” service to the US, although it plans to add them in the future. It meant that in the last few weeks Verity sent the books as parcels to the US, which she said “cost a fortune”.
Royal Mail and DHL Express both said they give all their business customers access to a duty calculator. Verity said that when she asked, Royal Mail did not provide “anything like that” and “DHL sent us a link to something that doesn’t work”.
Verity has now received an invoice from Royal Mail, which fits with the expected 10 per cent tariffs the US has imposed on all UK goods.
Cocorose, a shoe company known for its foldable ballet pumps, has taken a different approach. While initially choosing to use a “duties paid” service, the company has decided that it will have to ask its American customers to pay duties when they receive their parcel. Gareth Austin-Jones, the director of Cocorose, said he hasn’t received “any pushback” for this yet, but that the company has only just started.
Penny Burgess runs a textile business in Selkirk and estimates 50 per cent of her business is from the US
“It’s not been as big a headache as what happened with us leaving the EU,” Austin-Jones said. “It has got better with the EU, but we’ve still lost a lot of direct-to-consumer business there. We’re just going to have to suck it up with America as well and see if we can try and recapture that lost business through UK sales and selling into other markets like Australia.”
Penny Burgess, founder of Penelope Textiles, which sells haberdashery items such as English lace and vintage materials, said the loss of the customs exemption might be “the end of it” for her business.
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Burgess estimates 50 per cent of her Selkirk-based business comes from US orders. She had been shipping through Pitney Bowes, the US ecommerce platform, but she said the company hasn’t been fulfilling her orders since the end of August. Pitney Bowes was contacted for comment.
Burgess said: “It’s not so simple for me just to shut shop and be like, ‘oh I’ll do something else.’ I’ve got about £200,000 tied up in my business. What do I do with all the stock? What else do I do for a job? I’ve done this for almost 20 years.”
She has not been able to set up a Royal Mail business account, so she has been sending orders through over-the-counter services and has been struggling with the amount of paperwork required for each order. She is looking at alternative shipping methods.
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“I’ve got orders building up that I’m waiting for information on. It’s costing me a fortune. It’s a logistical nightmare. I am a one-man band. I don’t have a postage department. I don’t have an IT department. I’ve got me that’s trying to keep track of stock orders.
“It’s just going to be the end of it if I lose my US market, I’ve lost say 30 per cent of my EU market [through Brexit] and the UK market, as much as I love it, it’s not enough to sustain a business,” Burgess said.
One shipping company that is trying to tackle these challenges head-on is called Zencargo. The digital freight forwarder has launched a service with the UK ecommerce giant THG, which will ship in bulk parcels from the UK to the US, reducing costs and delivery times for small businesses as well as larger companies.
Richard Fattal, co-founder of Zencargo, said: “We help them with the customs compliance, we help them with the duty costs per item, we help them with how they set their pricing as part of the onboarding, et cetera. And over time, if there are any opportunities to, for example, reduce their duty cost, if there are certain exemptions, for example, that they can access, we’re helping with that as well.”
William Bain, head of trade policy at the British Chambers of Commerce, warned that trading with the US may only get more complicated. “The arrangements that US Customs has put in place at the moment may move towards things like rules of origin [which goods are taxed on where they were made, rather than where they were shipped], because obviously the duties payable from goods from the UK would differ from those from the EU.
“So the US is going to have to work out some long-term rules in terms of how it makes that work. That means rules of origin. That means more complexity — more red tape.”
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