US Policy Shift Triggers 80% Drop in International Parcel Traffic

A dramatic restructuring of international shipping policies by the Trump administration led to an unprecedented 80% plunge in low-value postal parcels entering the United States. This significant decline, revealed in new data, underscores the far-reaching impact of trade-focused reforms on global logistics and e-commerce.

The root of this massive reduction lies in two key policy adjustments.

Firstly, the Trump administration moved to end a long-standing exemption for low-value parcels, specifically targeting goods that previously entered the U.S. duty-free under the Section 321 'de minimis' rule. This rule allowed parcels valued under $800 to bypass customs duties, a practice that critics argued gave foreign sellers, particularly from China, an unfair advantage over domestic businesses.

Secondly, and perhaps even more consequentially, was the administration's aggressive push to reform the Universal Postal Union (UPU).

For decades, the UPU, a United Nations agency, had dictated the rates that national postal services charged each other for delivering international mail. Under the previous system, developing nations, including economically booming countries like China, benefited from significantly lower terminal dues—the fees paid to the destination country for final delivery.

This meant it was often cheaper to ship a package from Beijing to New York than from Los Angeles to New York.

Viewing this as an economic disadvantage for American businesses and a subsidy for foreign competitors, the Trump administration issued a stark ultimatum in 2018: either the UPU reformed its rate-setting mechanism, or the United States would withdraw from the 145-year-old treaty.

This threat sent shockwaves through the international postal system.

Ultimately, a compromise was reached in 2019, allowing countries to 'self-declare' their terminal dues, effectively letting the U.S. set its own, higher rates for incoming international mail. This move dramatically increased the cost of shipping small, low-value packages to the United States, especially from countries like China that had previously enjoyed the most favorable UPU rates.

The combined effect of ending the de minimis exemption and implementing higher UPU rates created a formidable barrier for international senders of small parcels.

The convenience and cost-effectiveness that once fueled a surge in global e-commerce, particularly for inexpensive goods, were severely eroded. The staggering 80% drop in postal traffic is a direct testament to how sweeping policy changes can rapidly reshape the landscape of international trade and supply chains, fundamentally altering how goods move across borders.