Inside a quiet warehouse in New Zealand, thousands of meticulously arranged berets now rest in an unnerving state of uncertainty, trapped in a limbo that neither their creator nor their customers anticipated. These caps belong to Daan Kolthoff, the founder and sole operator of South Pacific Berets, a niche retailer he has nurtured and managed almost single-handedly for nearly two decades. Despite being based in Oceania, the majority of his clientele — an overwhelming 85 to 90 percent — reside in the United States, a country that has long provided a steady and reliable stream of business. Yet that commercial lifeline has been abruptly severed in recent days, leaving Kolthoff and his enterprise facing a daunting predicament.
The disruption stems from an unexpected decision that rattled global supply chains. New Zealand’s national postal carrier, alongside postal services in many other countries, has temporarily suspended parcels destined for American customers. This pause came just in advance of the Trump administration’s termination of the long-standing *de minimis* rule, an exemption that had permitted small shipments valued below $800 to enter the United States tariff-free. That exemption, instrumental for countless small international sellers, is ending as of Friday. To put the magnitude in perspective, U.S. Customs and Border Protection has processed approximately four million such low-value shipments *each day*, underscoring the sheer scale of transactions that will now be subject to import duties.
For entrepreneurs like Kolthoff, who depend almost entirely on this affordable and efficient shipping model, the consequences have been immediate and disorienting. He explained to *Business Insider* that his first response was to cancel pending orders and issue refunds, while attempting to provide transparency to customers. However, such efforts were hampered by the scarcity of concrete information — no authority could specify whether the disruption would last days, weeks, or potentially stretch into months. Within days, he refunded nearly $2,000 worth of orders to American customers, losses that he expects to multiply before the end of the month. And while his storage facility remains stocked with berets already paid for to suppliers, the inability to ship them abroad immobilizes the very foundation of his small-scale, $100,000 to $120,000-a-year business.
The suspension of deliveries reflects a broader paralysis in global ecommerce logistics. Once the *de minimis* exemption officially vanishes, all packages to the U.S., regardless of how minor their contents or origins, will be liable for duties. This has prompted at least 25 national postal operators to halt such shipments, citing both confusion and the need for time to integrate new systems that can handle the additional forms, declarations, and bureaucratic hurdles. A few narrow exceptions still exist — such as documents or modest personal gifts valued at less than $100 — but for most retailers, this represents a seismic shift. Private courier giants such as FedEx and UPS continue to operate routes into the U.S., yet their services are prohibitively expensive for small vendors working with products often priced under $100. As Kolthoff himself observed, shipping fees frequently rival, or even outstrip, the actual price of the items being sold.
These challenges are not isolated to New Zealand. In Japan, for example, the co-founders of the online stationery shop Neko Neko Post — Sharla Hinskens and Ushka Wakelin — have also been confronted with an existential threat. With 85 percent of their customer base located in the U.S., the announcement of new tariff rules struck with the force of a shockwave. Unwilling to saddle customers with unpredictable fees that could range anywhere from $40 to $150 per order, the duo halted all U.S. shipments after August 23. In fact, once they announced this impending cutoff ten days in advance, demand from their American clientele temporarily exploded, producing several hundred orders in a matter of days and forcing the pair to work from morning until late at night to meet the unexpected surge.
Similar anxieties spread to India, where Kavea R. Chavali, founder of the handloom sari business Kalaneca, has had to navigate the ripple effects among her American patrons, who represent 65 percent of her international orders. Unlike Kolthoff, Chavali relies on private couriers — meaning her logistics have not been paralyzed by suspended postal service. Nevertheless, awareness of incoming duties incited her customers to place orders at a dramatically accelerated pace. On a single day, her 19-person team shifted from the modest daily output of just a few saris to the extraordinary task of preparing nearly 50 parcels for shipment.
Faced with these new realities, small retailers are urgently searching for creative solutions. Neko Neko Post is experimenting with ways to keep reaching U.S. audiences regardless of the elevated trade barriers. Possibilities include developing smaller, lighter products such as compact journals and stickers that could fit within an envelope, thus potentially bypassing some of the prohibitions. They are even considering delivering goods directly to hotels where American tourists stay while visiting Japan. However, they concede the sudden loss of their U.S. market has been extremely painful, forcing them to reimagine the long-term sustainability of their venture without their most loyal community of supporters.
Chavali’s Kalaneca, likewise, is working with logistics partners to explore methods of optimizing costs for customers. These could involve consolidating multiple purchases into fewer shipments or coordinating with buyers to share delivery expenses. Given that her typical U.S. orders range from $300 to $2,000 in value, some customers are reportedly willing to shoulder modest additional fees — although the scope of future tariffs remains uncertain.
As for Kolthoff, his strategy involves broadening his consumer base and establishing connections with other New Zealand small businesses facing similar turmoil, hoping that solidarity and shared approaches may cushion the impact. Industry experts affirm that private couriers may currently represent the only practical alternative, albeit at significant expense. Manish Kapoor, CEO of Growth Catalyst Group and a veteran of FedEx and Amazon logistics operations, remarked that small retailers face a stark dilemma: they must either pay dramatically higher shipping fees or cease reaching their customers altogether. He suggested that pooling shipments through freight forwarders may be an essential tool for survival.
Sean Henry, CEO of the logistics startup Stord, further advised that micro-businesses cannot endure without consolidating orders and considering U.S.-based fulfillment centers, where domestic postage offers far faster and cheaper delivery. He described additional strategies such as bundling products into kits or raising free-shipping thresholds to maintain profitability. Yet for all these suggestions, no plan truly eliminates the underlying instability introduced by shifting U.S. trade policies.
When postal services ultimately restart their routes, customers across the United States will almost certainly face higher bills as sellers inevitably pass along part of the increased logistical costs. For artisans like Kolthoff, this escalation presents a troubling reality: his modest operation, with already narrow margins, cannot absorb the added burden indefinitely. As he put it candidly, the business is simply too small to weather such price rises without serious consequences.
Sourse: https://www.businessinsider.com/trump-tariff-de-minimis-postal-suspension-small-business-impact-solutions-2025-8
