Q: Hi Peter & Team:
I found this Reuters article yesterday:
https://www.reuters.com/investigates/special-report/drugs-fentanyl-shipping/
Long article. It basically states that a very popular method for Fentanyl precursor chemicals to get stateside is via small value packages from China that are classed as “de minimus” and sail through US Customs at LAX airport with little documentation and hardly any inspection. (1 Billion small value boxes every year, think via ebay, etsy, etc most from China, many labeled as “gifts” or “stuff”.
Until a few days ago the de minimus limit for goods entering USA was 800$- it is now ZERO.
This I believe forces better documentation and allows for better inspection options. In Canada our de minimus limit remains at 20$ (at least as I write this note).
Question:
Assuming the de minimus limit for both USA and Canada are both set at ZERO, how will this e-commerce drag affect Shopify or e- commerce in general ?
Thanks for all you do !
I found this Reuters article yesterday:
https://www.reuters.com/investigates/special-report/drugs-fentanyl-shipping/
Long article. It basically states that a very popular method for Fentanyl precursor chemicals to get stateside is via small value packages from China that are classed as “de minimus” and sail through US Customs at LAX airport with little documentation and hardly any inspection. (1 Billion small value boxes every year, think via ebay, etsy, etc most from China, many labeled as “gifts” or “stuff”.
Until a few days ago the de minimus limit for goods entering USA was 800$- it is now ZERO.
This I believe forces better documentation and allows for better inspection options. In Canada our de minimus limit remains at 20$ (at least as I write this note).
Question:
Assuming the de minimus limit for both USA and Canada are both set at ZERO, how will this e-commerce drag affect Shopify or e- commerce in general ?
Thanks for all you do !
5i Research Answer:
The moves will likely impact China shippers such as Temu more. SHOP recently disclosed that ~66% of revenues came from the
United States. We would likely expect that any cost increases from tariffs or regulations to get passed through to subscribers rather than SHOP absorbing the incremental cost. We'd expect SHOP could be negatively impacted near-term on the perceptual headwind, although we think few merchants would leave the platform even if pricing increased.