Suspension of De Minimis Exemption by US to have implications for Space Gits' crowd-funding campaign assessment
In a recent development, the suspension of the De Minimis Exemption by the White House means that US backers of international crowd-funding campaigns will now have to pay import duties on goods valued at or below $800. This change particularly affects small shipments common in crowd-funding rewards, such as those for board games.
Under the new rules, all relevant postal items under $800 that would have qualified for the exemption are now subject to a duty rate of either 30% of their value or a flat $25 per item, which will increase to $50 per item after June 1, 2025.
For instance, a backer receiving a project reward worth $50 would incur a 30% duty ($15) or a $25 charge, whichever is higher. After June 2025, the flat fee increases to $50 per item, which can substantially raise the total cost for backers.
The cost calculation is either a percentage rate of 30% of the item's value or a fixed fee per item, whichever results in a higher payment. This change particularly affects small shipments common in crowd-funding rewards where the previous exemption helped avoid duties.
The books and miniatures for the Space Gits crowd-funding campaign, for example, are manufactured in the EU. Packages will be assessed duties according to one of two methodologies: Ad valorem duty or Specific duty. The decision of which method to apply is in the hands of the carrier.
It is unclear whether books and miniatures will be exempt from the tariffs. However, UK and EU backers already pay around 20% extra in sales tax (VAT) for the rulebook and miniatures. The estimated additional cost for US backers is around 20% of their pledge value.
For goods manufactured in the EU, which currently has a deal for a tariff rate of 15%, the Specific duty is $80 per item, making it the upper end of the package values that would use Ad valorem duty. For countries with an effective IEEPA tariff rate of less than 16 percent, the Specific duty is $80 per item.
After six months, all applicable shipments must comply with the ad valorem duty methodology. The White House's tariffs essentially function as a new US federal sales tax on imported products, paid for by the consumer.
Trump's tariffs have been a point of contention for many, as they could potentially lead to increased costs for consumers and potential project cancellations. Backers are advised to check with their carriers for further details on how this change will affect their specific shipments.
- The new tariffs, imposed by the White House, will significantly impact the game design industry, as US backers of international crowd-funding campaigns will now have to pay import duties on goods valued at or below $800, including reward shipments for board games.
- The increase in costs for imported products, such as books and miniatures for a crowd-funding campaign like Space Gits, is a concern for both the industry and politics, as it might lead to increased costs for consumers and potential project cancellations.
- In the wake of these changes in policy-and-legislation, financial analysis becomes crucial for both the game design industry and general news, as it helps to understand the impact of these tariffs on the overall cost for backers and the industry's future.
