Key differences: Postal vs. commercial tariffs
Executive Order 14324 fundamentally changed how duties are calculated on postal shipments to the United States. Unlike commercial shipments that are subject to all applicable duties (including MFN rates, Section 232, Section 301, antidumping, and countervailing duties), postal shipments are subject only to IEEPA tariffs. This creates a simplified but specific tariff structure that postal operators and ecommerce businesses need to understand for accurate duty collection and pricing strategies.
Postal shipments are subject to IEEPA tariffs only, which include:
- Reciprocal tariffs: 10% minimum, ranging from 10-41% based on country
- Country-specific IEEPA tariffs: Additional tariffs for specific countries that stack on top of reciprocal tariffs
- Fentanyl-related tariffs: IEEPA-based tariffs targeting fentanyl precursor chemicals
Commercial shipments through carriers like UPS, FedEx, and DHL are subject to:
- All IEEPA tariffs (same as postal)
- Section 232 tariffs (steel, aluminum, copper, auto parts)
- Most Favored Nation (MFN) rates
- Section 301 tariffs (e.g., China tariffs)
- Antidumping and countervailing duties
- All other applicable trade remedies
Example comparison: T-shirt made in China
A t-shirt manufactured in China valued at $300:
| Shipment Type | IEEPA China | IEEPA Reciprocal | Section 301 | MFN Rate | Total Rate | Total Duty |
|---|---|---|---|---|---|---|
| Postal | 20% | 10% | Not applied | Not applied | 30% | $90 |
| Commercial | 20% | 10% | 7.5% | 16.5% | 54% | $162 |
Complete IEEPA tariff structure by country
Based on the latest CBP guidance, here are the current IEEPA rates for postal shipments:
Major ecommerce origin countries
| Country | Reciprocal Rate | Country-Specific IEEPA | Total IEEPA Rate | Notes |
|---|---|---|---|---|
| China/Hong Kong | 10% | +20% | 30% | Includes fentanyl-related tariffs |
| Brazil | 10% | +40% | 50% | Stacks with reciprocal |
| Canada | 35% | +0% | 35% | |
| Mexico | 25% | +0% | 25% | |
| India | 25% | +25% | 50% | |
| Vietnam | 20% | +0% | 20% | |
| Thailand | 19% | +0% | 19% | |
| United Kingdom | 10% | +0% | 10% | |
| Germany | 15% | +0% | 15% |
Section 232 vs. IEEPA: Critical difference for postal
Many products subject to high Section 232 tariffs (steel, aluminum, copper, auto parts) are only subject to reciprocal IEEPA rates when shipped via postal.
Example comparison: Section 232 products
Steel and auto parts from Germany valued at $50 each:
| Product Type | Section 232 | IEEPA Reciprocal | Postal Rate | Commercial Rate | Postal Duty | Commercial Duty |
|---|---|---|---|---|---|---|
| Steel products | 50% | 15% | Not applied | 50% | $7.50 | $25.00 |
| Auto parts | 50% | 15% | Not applied | 50% | $7.50 | $25.00 |
Multi-item packages: Individual calculation
One of the most important aspects of postal IEEPA calculations is how tariffs are applied when a package contains multiple items from different countries. Zonos uses individual item calculation, which is the most cost-effective approach.
Example: Multi-item package calculation
Mixed ecommerce package with items from different countries:
| Item | Origin | Value | IEEPA Rate | Duty Amount |
|---|---|---|---|---|
| Phone case | Vietnam | $15 | 20% | $3.00 |
| Phone charger | China | $25 | 30% | $7.50 |
| Screen protector | Brazil | $10 | 50% | $5.00 |
| Total | $50 | $15.50 |
Why this matters for ecommerce
- Individual calculation: Each item is calculated based on its own country of origin
- Cost-effective: More favorable than alternative calculation methods
- Zonos handles CBP entries: Proper duty remittance ensures accurate calculations
Ecommerce examples by major origin countries
Example comparison: Popular ecommerce products
| Product Category | Origin | Item Value | IEEPA Rate | Duty Amount |
|---|---|---|---|---|
| Electronics accessories | China | $20 | 30% | $6.00 |
| Clothing and fashion | China | $35 | 30% | $10.50 |
| Coffee and food | Brazil | $30 | 50% | $15.00 |
| Textiles and apparel | India | $35 | 50% | $17.50 |
| Leather goods | Brazil | $60 | 50% | $30.00 |
| Maple syrup | Canada | $20 | 35% | $7.00 |
| Outdoor gear | Canada | $80 | 35% | $28.00 |
| Artisan crafts | Mexico | $30 | 25% | $7.50 |
| Textiles and apparel | Vietnam | $35 | 20% | $7.00 |
| Electronics accessories | Vietnam | $20 | 20% | $4.00 |
USMCA and postal shipments: Important distinction
USMCA does NOT apply to postal shipments
Critical: USMCA-originating goods from Canada and Mexico are NOT exempt from IEEPA tariffs for postal shipments. All postal shipments pay the full IEEPA rates regardless of USMCA qualification.
Why this happens: There is no methodology for providing proof of USMCA origin in the postal environment. Unlike commercial shipments where importers can submit certificates of origin and other documentation, postal shipments lack the infrastructure to verify and process USMCA qualification.
Canada: USMCA-originating goods still pay 35% total IEEPA rate Mexico: USMCA-originating goods still pay 25% total IEEPA rate
Commercial vs. Postal: Documentation requirements
Commercial shipments: Can qualify for USMCA exemptions, but require:
- Certificate of origin documentation
- Proof of USMCA qualification
- Additional compliance costs and administrative burden
- Often expensive to obtain and maintain proper documentation
Postal shipments: No USMCA exemptions available due to lack of proof methodology
Practical ecommerce impact
Key point: All postal shipments from Canada and Mexico pay the full IEEPA rates regardless of USMCA qualification.
Example: Wooden furniture from Canada valued at $50
- Postal shipment: 35% total IEEPA rate = $17.50 duty
- No USMCA exemptions apply to postal shipments
Value thresholds and entry requirements
Under $800: Postal DDP process
Packages valued under $800 USD can be processed through the postal DDP system:
- Subject to IEEPA tariffs only
- No formal entry required with CBP
- Duties must be collected at origin
- Carriers or qualified parties remit duties monthly to CBP
$800 to $2,500: Informal entry required
Packages valued between $800 and $2,500 require informal entry:
- Do not collect duties at origin for these shipments
- CBP will process through standard informal entry procedures
- Subject to all applicable duties (IEEPA + Section 232 + MFN + etc.)
- Standard customs clearance process applies
- Much higher duty rates than postal
Over $2,500: Formal entry required
Packages valued over $2,500 require formal entry:
- Do not collect duties at origin for these shipments
- Formal customs entry process required
- Subject to all applicable duties
- Professional customs broker typically required
Critical for ecommerce: Keep individual shipment values under $800 to qualify for postal rates. Split large orders across multiple shipments if beneficial.
Returns and repairs: No special treatment
Returns and repairs pay full IEEPA rates
Return shipment examples
Example 1: Customer returns a $100 smartphone from China
- Duty rate: 30% IEEPA (same as original shipment)
- Duty amount: $30 (no reduction for return)
Example 2: Repair shipment from Germany ($50 value)
- Duty rate: 15% IEEPA (same as new product)
- Duty amount: $5 (no special repair exemption)
Key considerations for ecommerce
- Returns: Factor in duty costs when processing international returns
- Repairs: Repair shipments pay the same rates as new products
- Warranty service: No special treatment for warranty-related shipments
- Customer expectations: Customers may be surprised by duty charges on returns
Business impact: Returns and repairs can be expensive due to duty charges, affecting profitability and customer satisfaction for international ecommerce operations.
Returns and repairs: Updated treatment
-
Unused merchandise returns: Eligible for duty-free status if the package is still intact and bears the proper original USPS labelling.
-
Repairs and used goods: Not eligible for duty-free treatment under the postal IEEPA system; standard IEEPA rates apply based on country of origin.
Examples
-
Unused return from China, $100 value, original USPS label intact → Duty-free
-
Repair shipment from Germany, $50 value → 15% IEEPA → $5.00 duty
Non-deliverables and refunds
- Current state: There are no refund mechanisms in place for non-deliverables by post. Plan collections and customer communications accordingly.
Exemptions
- IEEPA-exempt items: Per CBP, any IEEPA-exempt items are eligible for postal exemption and must be notated on the IMD Worksheet (e.g., books, bona fide gifts under the applicable threshold).
- Books: Printed books and other “informational materials” are not subject to IEEPA tariffs (50 U.S.C. § 1702(b)(3), the “Berman Amendment”).
Build duties into product pricing
Example approach for China-origin products:
- Base product cost: $50
- Add 30% for duties: $15
- Final price to customer: $65+ (includes duty)
- Customer pays no additional fees at delivery
Is the reciprocal rate always 10%?
No. While 10% is the minimum, reciprocal rates range from 10% to 41% across 95 countries. However, major ecommerce origin countries typically have the 10% base rate, with country-specific tariffs added on top.
Example comparison: Section 232 products
Steel and auto parts from Germany valued at $50 each:
| Product Type | Section 232 | IEEPA Reciprocal | Postal Rate | Commercial Rate | Postal Duty | Commercial Duty |
|---|---|---|---|---|---|---|
| Steel products | 50% | 15% | Not applied | 50% | $7.50 | $25.00 |
| Auto parts | 50% | 15% | Not applied | 50% | $7.50 | $25.00 |
Can I use postal rates for packages over $800?
No. Packages valued at $800 USD or higher should follow standard customs entry procedures:
- $800-$2,500: Informal entry process
- Over $2,500: Formal entry process
- These shipments are subject to all applicable duties (much higher rates)
- CBP handles the duty collection process
- Much higher costs than postal rates
What's the difference between fentanyl-related and Section 301 tariffs?
Fentanyl-related tariffs:
- Are IEEPA tariffs that do apply to postal shipments
- Primarily affect China (adds 20% to the 10% reciprocal)
- Target fentanyl precursors and related chemicals
- Part of the 30% total rate for China postal shipments
Section 301 tariffs:
- Do NOT apply to postal shipments
- Apply only to commercial shipments
- Separate trade remedy targeting unfair practices
- Would add another 7.5% or 25% for commercial China shipments
Can I change calculation methods?
Zonos uses individual item calculation for all postal shipments, which is the most cost-effective approach. This method:
- Calculates each item based on its own country of origin
- Provides the lowest possible duty costs for mixed-origin packages
- Ensures accurate CBP reporting and duty remittance
- Eliminates the need for complex methodology switching
What happens if CBP determines different duties should have been applied?
If CBP determines that different duties should have been applied:
- Higher assessment: You'll be invoiced for the difference
- Lower assessment: You'll receive a credit on your next invoice
- Common causes: Incorrect country of origin, product classification errors
- Protection: Some solutions offer landed cost guarantees against increases
Prevention tips:
- Ensure accurate country of origin declarations
- Use proper HS code classifications
- Maintain detailed product documentation
Resources and updates
IEEPA tariff rates are subject to frequent changes based on ongoing trade policy decisions. Key resources:
- CBP CSMS messages: Official guidance on tariff updates
- CBP Publications: New Tariff Requirements for 2025
- Executive Orders: Presidential directives affecting tariffs
- Federal Register: Formal rule publications
- Trade bulletins: Industry-specific updates
Stay informed: IEEPA rates can change monthly. Subscribe to CBP trade notifications and work with qualified parties who maintain current rate schedules.
Postal IEEPA Tariffs
Understanding how International Emergency Economic Powers Act (IEEPA) tariffs are calculated and applied to postal shipments to the United States.
Key takeaway: Postal shipments only pay IEEPA tariffs (10-50%), while commercial shipments pay all duties (can exceed 70%).