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The unexpected shift in the world of trade by the President of the United States, Donald Trump, has left exporters in limbo. There has been a hike in import tariffs on a dozen countries.
As per the new rule, the universal 10% baseline tariff applies to nearly all imports into the U.S. However, the trade bomb hit hard on nations that face a 50% tariff.
For Nepal specifically, the minimum of 10% applies, so all the exports from Nepal to the U.S face a 10% tariff.
This has definitely impacted Nepalese goods and industries built on sustainable craftsmanship, like our own at Felt and Yarn.
Before, businesses like ours operated under a globally supported system that kept trade equitable and accessible. But the recent announcement has changed how it treats De Minimis shipments.
What has changed?
On July 30, 2025, Trump signed an Executive Order (EO) that suspended the Di Minimis Treatment for all countries effective August 29, 2025.
Previously:
- The De Minimis threshold provision of U.S. imports allowed goods valued at $800 or less to enter the country without any duties or taxes.
- Only goods exceeding $800 were subject to a 6% tariff under the Harmonized Tariff System (HTS) code used for felt goods.
Now:
- Due to the revocation of De Minimis, all shipments for handmade products, irrespective of the value, will need to pay 6% tariff with an additional 10% customs duties.
- All handmade products from Nepal are subject to 16% duties and taxes, regardless of the cost.
This rule was the lifeline for many exporters in Nepal and other developing countries, making the goods more competitive against mass-market, machine-made imports.
Impact on Handmade Felt Products
At Felt and Yarn, we don’t mass-produce; all our products are handmade. From pet toys to holiday garlands, crafts, and decor, all are made by over 2,000 Nepalese women artisans by hand, and they are empowered with safe workplaces, skills training, and fair wages.
The De Minimis benefit once helped us and our clients avoid unnecessary costs, making sustainability affordable.
But under the new rules:
- U.S. retailers now face duties of up to 16% on each shipment sourced from the U.S.
- Small brands, along with e-commerce stores, now face a significantly higher tax burden that they need to pay at customs.
- Our ability to deliver cost-effective, ethically made goods to U.S. partners is increasingly challenged.
How Does This Affect Our U.S. Customers?
As per the Trump tariff plan, which has imposed a 10% tax and duties, along with the elimination of the De Minimis rule, all shipments, regardless of value, will be subject to additional customs duties and processing fees upon arrival in the USA.
As a result, customers themselves would have to bear these additional charges before receiving their packages.
What This Means:
- All shipments from Nepal, regardless of value, are now subject to a combined 16% duty (10% new baseline tariff + 6% existing HTS duty).
- This duty is not included in your invoice from Felt and Yarn.
- Instead, you will be required to pay these additional charges directly to U.S. Customs or the delivery carrier before your package can be released.
- All applicable duties, taxes, and customs fees are the responsibility of the buyer.
This, unfortunately, is something that is not in your control. Though this rule has created some challenges, we remain committed to working with our partners to minimize disruptions and optimize shipments for cost efficiency where possible.
Despite the changes, Felt and Yarn’s belief remains unchanged; our mission remains firm.
“Crafts that tell a story”, stories of resilience, of sustainable growth, and of global collaboration.
Let’s continue building this story together.