Month: August 2025

Shippers around the world have begun pausing some deliveries to the U.S. as a customs tax exemption for low-value goods will come to an end this Friday.

President Donald Trump issued a July 30 executive order to close the de minimis exemption, a customs tax rule that has allowed millions of cheap shipments everyday to flow into the U.S., for all countries, effective Aug. 29, as part of his broader protectionist trade campaign. 

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The exemption let parcels under $800 enter the U.S. without customs duties, making the shipments cheaper and faster for businesses and consumers. Already, global shippers from dozens of countries have suspended U.S. deliveries as they anticipate the end of the exemption—a move that experts say could lead to higher prices for U.S. consumers, shipping delays, and in the long term a shift in global supply chains. 

While some speculate that the growing global response to the end of the de minimis exemption may persuade Trump to reverse course on yet another position, the “One Big Beautiful Bill,” which was signed into law in July, requires the exemption to be permanently eliminated by July 2027.

At least 25 countries suspend deliveries

Postal services in a growing number of countries have announced pauses to their deliveries to the U.S. Shippers in Europe said they would suspend most shipments to the U.S. this week. Australia’s postal service on Tuesday said it would be doing the same, as have postal services from India, New Zealand, Taiwan, and Japan. The United Nations’ Universal Postal Union said on Tuesday that postal operators of 25 member countries have suspended services to the U.S.

“Key questions remain unresolved, particularly regarding how and by whom customs duties will be collected in the future, what additional data will be required, and how the data transmission to the U.S. Customs and Border Protection will be carried out,” DHL said on Aug. 22, announcing that Deutsche Post and DHL Parcel Germany will pause deliveries to the U.S.

Ashley Dudarenok, who runs a China and Hong Kong-based consumer-research consultancy, tells TIME many shippers aren’t equipped to handle the new duty collection requirements on the roughly four million packages that enter the U.S. duty-free per day.

It “creates a massive bottleneck,” Dudarenok says, and the more that shippers suspend deliveries, the more there will be a “domino effect” as more shipments get pushed through private couriers like FedEx and UPS, leading to higher shipping costs.

Dudarenok points to Chinese shippers, for whom the de minimis exemption ended in May—although new rules were introduced as part of the U.S.-China trade truce that month that effectively lowered the duties applicable to low-value goods from China and Hong Kong. Chinese e-commerce exports to the U.S. fell 65% in terms of volume in the first fiscal quarter this year in light of Trump’s tariff policies.

U.S. consumers will likely see higher prices very quickly, she says: “A $12 children’s swimsuit from Temu now costs $31 after duties, nearly tripling the price. Imported goods are expected to become 12-22% more expensive across the board.”

“The suspension of U.S. deliveries by major global shippers is a clear signal that the trade system is under serious stress,” says Emil Stefanutti, CEO of Gaia Dynamics, an AI-powered trade compliance platform.

As postal services pause deliveries because they “decide they cannot reliably move parcels across borders,” businesses around the world and those in the U.S. that manufacture overseas will be “left scrambling to manage expectations” from American consumers, he adds.

“Think of it like adding toll booths to a freeway that was built for free-flowing traffic,” Stefanutti says. “The road still works, but suddenly congestion builds, delays spread, and everyone pays more to get where they are going.”

Stefanutti says it’s not just about rising costs due to the customs duties. Businesses must also contend with “mounting compliance expenses and clogged supply chains,” while facing shipping delays due to customs brokers handling a “flood of filings” at times with outdated systems.

“For consumers, it means packages stalled in transit, surprise import charges, and rising checkout totals,” he says.

“Unless new systems are built to handle the flood of filings, customs brokers and carriers will remain under strain for months, if not years,” Stefanutti says. “E-commerce volumes aren’t shrinking, yet the compliance load has suddenly multiplied. So while shoppers may feel sticker shock within weeks, the deeper structural pressure on trade and logistics is likely to persist well into the future.”

‘Could permanently reshape how Americans shop’

Sean Henry, CEO and co-founder of Stord, a third-party logistics provider focused on e-commerce and direct-to-consumer brands, says the change could lead to long-term shifts in U.S. consumer behavior.

As consumers see new line items for “import duties” and “customs fees” on their purchases, they may “rethink the way they’ve shopped for years,” he says, pointing to additional trade policies, like high tariffs on countries that produce a bulk of the world’s apparel and footwear. “While the exact fees will likely fluctuate as other factors come into play in the future, consumers should accept that this is the new standard.”

In the long term, that could also benefit businesses that manufacture within the U.S. or sell locally-acquired secondhand products, which some have said is long overdue as the de minimis exemption has disproportionately benefitted fast fashion e-commerce giants like Shein and Temu.

“This is a complete restructuring of cross-border commerce that is going to level a playing field that has long been skewed,” says Henry.

“Small U.S. manufacturers may actually benefit as imports become less competitive, but import-dependent businesses face major disruption,” Dudarenok adds. The latter includes Amazon Haul, Etsy sellers, and Shopify merchants that rely on international suppliers.

“The convenience factor that drove the explosion from 134 million de minimis packages in 2015 to 1.36 billion in 2024 is disappearing,” she says. “This could permanently reshape how Americans shop internationally.”

Long-term shift towards regional supply chains

The end of de minimis, alongside Trump’s broader tariffs on the rest of the world, could also lead to a long-term shift away from global supply chains, experts say.

Many companies, including Shein, are already shifting from direct-to-consumer shipping to bulk warehouse models, Dudarenok says. Others are opting to source within the U.S. or from countries facing lower tariffs and fewer restrictions, like Mexico and Canada.

“The reality is that cheap and fast always came with hidden costs, whether through labor exploitation, unsafe products, or environmental shortcuts,” Stefanutti adds. “The de minimis exemption lets many of those gray areas persist. With that loophole closed, supply chains are being pushed to become more secure, more transparent, and more ethical.”

Stord projects as much as a 75% drop in small-parcel shipment volume to the U.S. from 800-900 million packages annually down to around 200-300 million.

“It’s accelerating the shift toward regional supply chains—companies are establishing U.S. warehouses and sourcing closer to home to avoid international shipping complications entirely,” Dudarenok says, though doubts persist about the ability of the U.S. manufacturing sector to fill the gap.

At the same time, the U.S. market may lose its importance globally: Chinese exporters have redirected 28% more volume to Europe at the same time that U.S. shipments fell.

“If not for the tax loophole, sending these international parcels would be slow, costly, and inefficient,” says Henry. For many postal services around the world, especially as the volume of international shipping has grown, “it’s easier to stop serving the American market entirely rather than deal with the new customs requirements,” he adds.

In any case, Dudarenok says, “The era of cheap, fast international shipping likely is over.”

Today, global media company TIME announced TIME Africa, a new regional editorial expansion in collaboration with Global Venture Partners (GVP).

TIME Africa will launch as a digital and live events platform, bringing TIME’s trusted journalism and  convening power to audiences across the continent. The digital launch of TIME Africa is slated for Q3 2025 at africa.time.com.

“TIME has provided trusted journalism and thoughtful perspectives to readers around the world for over a century. With the launch of TIME Africa, we are continuing our commitment to reach new audiences, further our presence and coverage of the continent’s leaders, visionaries, and changemakers, and shine a spotlight on the stories that matter most. We are pleased to collaborate with Global Venture Partners to bring this platform to the continent,” said Jessica Sibley, Chief Executive Officer of TIME.

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“TIME is one of the most respected and recognized brands in the world, and we are proud that GVP was selected as the trusted partner for the brand’s Africa expansion,” said Josh Wilson, Managing Director of Global Venture Partners. “Africa is going through massive transformation across business, culture, and society, and now more than ever it is critical that the continent has a dedicated platform within TIME to spotlight its growth and impact on the world stage.”

TIME Africa will be available in English and French and will be distributed to the following territories: Algeria, Angola, Benin, Botswana, Burkina Faso, Burundi, Cabo Verde (Cape Verde), Cameroon, Central African Republic, Chad, Comoros, Democratic Republic of the Congo (DRC), Republic of the Congo, Djibouti, Egypt, Equatorial Guinea, Eritrea, Eswatini (formerly Swaziland), Ethiopia, Gabon, Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast (Côte d’Ivoire), Kenya, Lesotho, Liberia, Libya, Madagascar, Malawi, Mali, Mauritania, Mauritius, Morocco, Mozambique, Namibia, Niger, Nigeria, Rwanda, São Tomé and Príncipe, Senegal, Seychelles, Sierra Leone, Somalia, South Africa, South Sudan, Sudan, Tanzania, Togo, Tunisia, Uganda, Zambia, and Zimbabwe. 

The announcement of TIME Africa arrives during a period of dynamic growth and innovation for TIME. Today, the brand reaches more than 120 million people worldwide across all platforms, representing its largest, most global, and most diverse audience in history. TIME’s in-depth reporting has consistently shaped global conversations and elevated stories from across the African continent—including the TIME100 Impact Awards Africa, hosted in Rwanda and honoring visionaries such as Danai Gurira, Ellen Johnson Sirleaf, and Fred Swaniker; annual recognitions in the TIME100, TIME100 Next, TIME100 Philanthropy, TIME100 Climate lists; interviews with leaders including Dr. Tedros Adhanom Ghebreyesus, who was included on the 2025 TIME100 Health; TIME’s World’s Greatest Places, which regularly spotlights remarkable destinations across the continent. TIME’s coverage has also addressed pressing issues such as climate justice, with covers like “The Climate Issue” featuring activist Vanessa Nakate, who was also named as a recipient of the 2023 TIME Earth Awards. 

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• A Scale AI product exec likened AI firms to content studios, not software companies.
• AI firms invest heavily in short-lived projects, similar to Hollywood studios, he said.
• Scale AI builds AI solutions using models from OpenAI and other frontier labs.

One exec is comparing the business model of companies like OpenAI and Meta AI to Marvel Studios.

On an episode of the “a16z Podcast” published on Tuesday, Scale AI’s head of product for enterprise applications, Ben Scharfstein, said his most controversial opinion on AI is that AI foundational companies are more like content studios than software companies.

“My hottest take is I think the right way to think about foundation labs is that they’re like movie studios,” he said. “What I mean by that is they invest a ton of money in blockbusters that have a relatively short time span to pay them back.”

Scharfstein heads Scale AI’s enterprise applications business, which builds and deploys generative AI solutions for other companies. Scale AI, which received a $14.3 billion investment from Meta in June, is better known for its data annotation business, which helps Big Tech clients like Google and Meta improve their AI chatbots.

The exec compared large language model companies to Hollywood studio Marvel, famous for its blockbuster superhero movie franchises.

“Marvel, you’re investing in ‘The Avengers’ and you invest a billion dollars in it and then it maybe pays you back over the next 18 months,” he said. “It’s pretty irrelevant after that.”

Much like “The Avengers,” companies like OpenAI are also building franchises with GPTs that are built off the previous models, he said.

“It’s just very similar. You’re able to turn that franchise maybe into a video game and then maybe it is more like software,” he said. “But actually right now the model companies look more like a content studio than they do like a software company.”

Scale AI builds its custom generative AI solutions using models including OpenAI’s GPT-4, Cohere’s Command, and Meta’s Llama 2, according to its website. In June, OpenAI said it hit $10 billion in annual recurring revenue, less than three years after launching its popular ChatGPT chatbot.

ScaleAI also relies on these frontier labs and has worked with nearly every LLM company, including Meta, OpenAI, and Google’s DeepMind for its AI training business, according to an internal client dashboard Business Insider reviewed.

Last month, Scale AI reduced its 1,400-person workforce by 14% in cuts that affected 200 employees in its generative AI division.

In an internal email viewed by Business Insider, interim CEO Jason Droege said Scale AI ramped up capacity “too quickly over the past year” on GenAI, leaving other divisions, like its public sector units, “under-resourced.”

ScaleAI did not immediately respond to a request for comment.