Cettire shares plunge as US suspends De Minimis exemptions for shipments under US$800

Luxury products dropshipper Cettire (ASX: CTT) has seen its shares fall further this morning after US President Donald Trump announced that from 29 August all countries would be excluded from the De Minimis Tax Exemption - a measure that allows for the duty-free treatment of shipments worth less than US$800.

The exemption was already removed for products shipped from mainland China and Hong Kong from 2 May, impacting Australian exporters that source their products from these markets.

Overnight Trump signed an executive order to suspend the exemption for all countries. It appears that for Australia, which has an IEEPA tariff rate of less than 16 percent, the duty to be collected per shipment will be $80 per item.

The IEEPA stands for the International Emergency Economic Powers Act, a law the US administration has used to justify its tariffs based on the declaration that persistent annual trade deficits constitute an emergency. The USA does not have a trade deficit with Australia, but our country has been included regardless. 

The news has not exactly sent shockwaves through the ASX but Cettire is one company that has seen its shares fall in response, with its share price dropping 19.12 per cent to $0.275 as a continuation of a steady downward trend since the start of the year when its shares were worth more than $1.50.

"In May and June 2025, being the months that reflect recent changes to US tariff arrangements already implemented, shipments to the United States represented approximately 40 per cent of Cettire’s gross revenues," the company stated.

"Shipments below the de minimis threshold represented the majority of sales to the United States during this period.

"Cettire is currently assessing the full implications of these tariff changes on the company and its global operations, noting that several major luxury brands have indicated they would seek to increase pricing of luxury goods in the US market to mitigate possible tariff changes."

Cettire notes it began identifying strategies to prepare for and mitigate potential changes to the US tariff regime throughout 2024 and the year to date in 2025, claiming a localisation strategy has underpinned a continued broadening of the geographic revenue base.

Sean Crook, co-founder and director of Sydney-headquartered logistics and freight forwarding group Neolink, says there is "a bit of panic right now" for smaller exporters who have been relying on the US$800 threshold to drip-feed parcels in.

"They either need to absorb the cost and compliance overhead or rethink their market entry strategy entirely," Crook tells Business News Australia.

He describes the latest announcement as a big shift, while the larger players have seen it coming.

"I’d say a lot of SMEs are feeling it pretty sharply this week if they haven’t been planning ahead," he says.

"Over the past few months at Neolink we’ve been working closely with a number of direct-to-consumer brands where 40-60 per cent of their revenue comes from the US market. For those guys, the removal of De Minimis has really been a line-in-the-sand moment.

"What we’re seeing now is a definite pivot away from fulfilling orders out of Australia when the goods are manufactured offshore."

Instead, he says Neolink is helping these businesses set up supply chains that go straight from their factories in China or other countries directly into the US on a wholesale basis, paying the tariffs upfront on a wholesale basis and then using third-party logistics providers to hold stock and fulfil locally.

"For some of our customers, Neolink is managing their 3PL and fulfilment in the US end-to-end; for others, we’re shipping direct into new warehouse set-ups they’ve invested in," he says.

"We’ve been running a lot of this out of our consolidation hubs in China, so we can control that whole process from factory to final warehouse. That way, our customers avoid extra complexity and can focus on their growth instead of firefighting logistics.

"For some clients this has been a gradual transition over the last year - they’ve been planning ahead - but for others it’s been a pretty fast pivot since the announcement."

He says the reality is that this change has just "accelerated a trend that was already coming".

"If you want to be competitive in the US, the model of routing goods through Australia first is dead weight," he says.

"The future is factory-to-US on a wholesale basis. It avoids double handling, brings down cost, and most importantly it gives the American consumer what they actually want - an all-in landed price and fast delivery. No-one in the US wants to be stung with duties and extra freight charges at checkout.

"From our side, the approach has been to get on the front foot and recommend these solutions before our customers feel the pain. It’s about designing their supply chain with the end-consumer in mind - simple, fast, and predictable. And while it’s a tough shift in the short term, the brands that move quickly will come out stronger, because their supply chains will be leaner and more future-proofed for where global trade is clearly heading."