Why British exporters are rethinking US fulfilment in the wake of de minimis removal

For many British retailers selling into the US, the de minimis exemption – which until recently enabled high volumes of goods under $800 (around £600) to move quickly and cheaply across the border – saw businesses thrive.

With no customs or tax, and minimal paperwork, the rule led to almost 1.4 billion packages entering the US duty-free last year.

However, as of 29 August 2025, this “loophole” was scrapped after the US government stated that it harmed domestic businesses and was being exploited to smuggle illegal goods.

Now, every shipment, regardless of value or origin, is subject to customs processes, duties and fees, adding further complexity and friction to an already intricate route to market, and, more crucially, increasing cost.

How that cost change has played out

With this policy change actioned over six months ago, its impact on duties, tariffs and customs has now begun to materialise, leading to an increase in the cost of an item by 30% or more.

For those with an existing customer base in the US and indeed those keen to expand operations and tap into the US market, UK brands have been faced with a choice.

One is to absorb the extra cost themselves. This keeps consumers happy, but it quickly eats into already thin margins. Here, profitability struggles, undermining the viability of US expansion.

Option two is to pass duties and fees on to consumers, which ultimately results in lower conversion rates, or if they do sell, a poorer customer experience, particularly if unexpected fees are applied at delivery. Any customer frustration around inflated pricing can also affect trust, which in turn impacts a brand’s identity in the market and reduces repeat purchases and competitiveness compared with local or duty-free alternatives.

With neither option desirable, some brands have even tried to offset costs triggered by either tariff changes or the removal of de minimis by shifting production away from higher-cost regions. But in many cases, the savings are minuscule and don’t tend to translate well to the US market, particularly when quality perceptions shift.

For any brand that doesn’t fully understand the cost base, or indeed enters the market with unrealistic assumptions around return rates or duties, the financial pressure of international expansion can quickly outweigh the opportunity. This is why, despite the US remaining an attractive opportunity, there is already a graveyard of UK brands that have entered the market but failed to build sustainable operations.

This is not for lack of demand, but because they attempted to navigate its complexity on their own, without the right partner to support. Take the fashion sector, for example. The US remains the largest apparel market in the world, worth over $372bn (£275.5bn) annually. It accounts for around a fifth of global apparel consumption, and is heavily reliant on imports – approximately 78% of apparel and 75% of footwear sold in the US are imported. Many UK-based fashion brands have a massive audience of customers in the US market that admire their brand and want to shop. Before, with the de minimis protection, they were able to maintain a large business in the US, especially brands with an average retail price under $350 (£259). Now, all of those orders being hit with additional costs results in brands having to change their entire U.S. strategy, many pulling out completely as the profitability hit outweighs the massive loss of revenue.

Even small cost increases can have a major commercial impact. In fact, a recent British Chamber of Commerce survey found that a quarter (24%) of UK goods exporters said an increase in costs of 10-15%, due to the removal of other countries’ de minimis, would put more than half of their overseas sales at risk. This shows just how big an impact rising costs can have when these thresholds disappear.

As costs rise and complexity continues to increase post the removal of the de minimis threshold, that graveyard is only set to expand if retailers don’t rethink their approach to the US market.

Why more brands are moving inventory stateside

Whether it’s tariffs or the removal of the de minimis threshold, it may seem like the barriers to selling in the US have become insurmountable, with none of the traditional routes offering a clear, sustainable path forward.

However, rather than pulling back completely, many brands are rethinking their approach, with a growing shift towards US-based fulfilment.

By landing goods in the US and fulfilling orders domestically, brands can create a more predictable cost base, reduce overall duty exposure and streamline returns. Just as importantly, it allows them to maintain a seamless buying experience for US customers, without unexpected fees at the point of purchase.

And this shift is already reshaping trade flows. Rather than dampening demand, it is redirecting it, with a US-based fulfilment now driving the fastest-growing segment of cross-border retail. But executing this strategy is far from Straightforward. Building a US-based operation from scratch requires time, investment and local expertise, creating a new barrier for brands already under margin pressure.

The case for a partner-led approach

As a result, a growing number of brands are counteracting the de minimis changes by sourcing a partner in the US to maintain and grow U.S. volume – not only to avoid writing off the market or damaging the customer experience, but also to unlock access to U.S. retailer partnerships to assist with brand expansion in the market.

US customers should not have to feel the shift, the solution – which offers a single point of entry, combining logistics, warehousing and retail connectivity into one streamlined route to market – is available behind the scenes for brands to continue to grow and evolve in the US. One of the main advantages here, particularly for the fashion sector, is speed; pre-established integrations with major retailers and marketplaces mean brands can launch in a matter of weeks rather than months. Domestic fulfilment also results in faster delivery and easier/less costly returns, resulting in customer satisfaction, which in turn drives repeat purchasing and customer loyalty. Then there’s meeting market demands and trends quickly; getting new product in front of the customer immediately vs. held shipments in customs overseas.

But in addition to speed, there is also a real reduction in terms of risk, with heavy upfront investment in local teams, systems or warehousing simply not needed.

At the same time, having access to on-the-ground expertise is vital if brands want to navigate a market that’s entirely different from their home ground – whether it’s merchandising decisions or returns management. Having an expert in the US to manage logistics also results in brands maintaining a 100% satisfaction rate on massive retailer Service Level Agreements with the likes of Nordstrom, Macy’s, Bloomingdale’s, etc.

In a market reshaped by the removal of de minimis, success is no longer about simply accessing US demand, but about how efficiently and sustainably brands can serve it. The retailers that will succeed are those that rethink not just where they sell, but how they land, price and fulfil their products from the outset.

As costs rise and complexity becomes the norm, a more structured, localised approach to the US market is fast becoming essential. Increasingly, that means working with partners that can provide the infrastructure, expertise and on-the-ground support needed to handle this shift effectively.

This is not just about unlocking growth, but avoiding becoming the next addition to an already crowded graveyard of failed expansion attempts.