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Dropshipping from AliExpress to the US and UK has never been more complicated. Once upon a time, you could ship products directly from China to customers without worrying about customs, duties, or surprise fees. Those days are gone. 

Between the elimination of the de minimis exemption, new tariff structures, and stricter customs enforcement, the landscape has shifted dramatically. If you're running an AliExpress dropshipping business targeting American or British customers, you need to understand what's happening at the border—and fast. 

This guide breaks down the real costs, compliance requirements, and practical strategies to keep your business profitable in 2025 and beyond.

Key Takeaways for AliExpress Dropshippers

• The de minimis exemption is gone. All shipments from China now face tariffs.
• The new US tariff structure is $200 per item or 120% ad valorem, whichever is higher (as of June 1, 2025).
• Postal shipments are hit hardest. Commercial carriers offer better rates for mid-to-high-value items.
• UK sellers face VAT registration requirements at £90,000 turnover and must comply with stricter customs documentation.
• Custom temporary tattoos and other low-value personalized items are nearly impossible to sell profitably via traditional AliExpress postal shipping.
• US/EU warehousing and domestic suppliers are becoming the standard for serious dropshippers.
• Compliance is non-negotiable. Accurate declarations, proper certifications, and transparent pricing protect your business.
• The AliExpress arbitrage game is over. Winners will adapt to higher-margin products, domestic sourcing, or hybrid models.

Understanding the De Minimis Rule and Why It Collapsed

For years, the de minimis exemption was the backbone of global e-commerce. Under this rule, any package valued at $800 or less could enter the United States duty-free, and the UK had a €22 threshold for VAT-free imports. This loophole fueled the explosion of AliExpress dropshipping and platforms shipping cheap goods from China directly to consumers without tariffs attached.

Sellers took full advantage. They could source custom temporary tattoos for $2, sell them for $15, and ship them internationally without collecting duties from customers. The math worked. Profit margins stayed healthy. Customers got rock-bottom prices. Everyone was happy—except the governments watching their tax revenues disappear.

What happened?

The reality is that billions of parcels started flooding Western ports. The US saw de minimis shipments jump from 140 million in 2013 to over a billion by 2023. China and its state-subsidized companies like Temu and Shein figured out how to exploit this gap, undercutting domestic sellers and accelerating the decay of American manufacturing. The UK saw similar trends post-Brexit, with tariff avoidance becoming standard practice.

On August 29, 2024, the US government eliminated the de minimis exemption for goods from China and Hong Kong. As of May 2, 2025, every single parcel—regardless of value—is now subject to import duties. This wasn't a temporary measure or a negotiation tactic. This was a permanent restructuring of how goods move across borders.

New US Tariff Structure for 2025 and Beyond

The new tariff system is complex, and the details matter because they directly impact your bottom line. Here's what changed:

May 2 to May 31, 2025

Duty is $100 per item OR 120% ad valorem (based on declared value), whichever is higher.

June 1, 2025 onward

Duty is $200 per item OR 120% ad valorem, whichever is higher.

Let's put real numbers on this. Say you're selling custom temporary tattoos from AliExpress at $12 retail:

• Your cost: $2 (from supplier)
• Your retail price: $12
• Customer's location: United States
• Shipping method: China Post (postal)

Under the old rules, your customer paid $12 and got the product delivered. Under the new rules, your customer faces a $200 duty charge (the flat fee is higher than 120% of $12, which would be $2.40). Suddenly, your customer is paying $212 for a $12 product. They'll request a refund. You'll lose the sale.

This is why dropshippers who relied on low-value, high-volume products are scrambling.

How Are Carriers Choosing Collection Methods?

Here's the part most sellers miss: carriers choose the collection method, not you. Every month, USPS, China Post, and other postal carriers decide whether to charge a flat fee or ad valorem duty across all their shipments from China and Hong Kong. This decision sticks for the entire month and applies consistently to all packages they deliver.

What does this mean? A budget-focused carrier like USPS might choose the 120% ad valorem method to keep flat fees lower on cheap items. An express carrier like DHL might choose the $200 flat fee to limit liability on high-value shipments. You have zero control over which method applies to your shipments. You can't plan pricing accurately. You can't guarantee costs to customers. This uncertainty is crushing the viability of traditional China-to-US dropshipping.

Trump Tariffs and Section 301: What You Need to Know

Beyond the de minimis elimination, there are additional tariffs under Section 301 of the Trade Act that specifically target Chinese goods in certain categories. These are separate from the postal duty and can stack on top of regular customs duties.

Section 301 covers

• Electronics (15% to 60%)
• Textiles and apparel (10% to 25%)
• Furniture (10% to 20%)

If you're dropshipping personalized tattoos or custom items made from textiles or materials subject to Section 301, your costs jump again. A personalized tattoo product might hit 25% Section 301 tariff plus the $200 flat fee plus standard customs duties. The layering effect makes margins impossible.

The Trump administration hasn't stopped there. They've signaled interest in additional tariffs on Chinese goods across nearly every category. Rates could climb higher before 2025 ends, which means your costs will rise retroactively on existing orders.

UK Customs, VAT, and Brexit Complications

The UK situation is different but equally complex. After Brexit, the UK is no longer part of EU customs arrangements. Imports from China now face strict customs checks, VAT collection, and import duties that often surprise customers.

UK threshold breakdown

• Under £15: Generally no customs check
• £15 to £150: VAT is charged at 20% on the value of goods plus shipping
• Over £150: Full customs duties, VAT, and handling fees apply

Here's the tricky part: When goods from AliExpress are sent to UK customers via China Post or similar postal carriers, the shipper (not you, the seller) is often responsible for declaring value. 

Many AliExpress suppliers undervalue items to reduce duties—a practice that gets packages flagged for closer inspection. If customs suspects undervaluation, they'll hold the parcel, contact the customer, and request proof of actual value. Delays stretch from weeks to months.

For personalized tattoos and custom items, you'll also face questions about whether the item is genuinely "personalized" or mass-produced. Customs officers don't always believe that a standard product with a name printed on it qualifies as a custom good. This can trigger additional scrutiny.

VAT Obligations for UK Sellers

If your UK turnover exceeds £85,000 per year, you must register for VAT. Once registered, you need to charge VAT at 20% on all goods sold to UK customers (unless you're using specific exemptions for cross-border sales). VAT compliance is non-negotiable. HMRC takes this seriously, and penalties for non-compliance can be substantial.

Shipping Methods and Their Impact on Costs

Not all shipping methods are created equal, and your choice here affects both costs and customs risk.

Postal Services

Here are the pros and cons when it comes to dropshipping by tying up with postal service like Royal Mail:

Pros

• Cheapest option per unit
• Handles most small parcels

Cons

• Now subject to the $200 flat fee or 120% ad valorem in the US
• Manual customs processing means delays
• Higher risk of hold-ups or lost packages
• Less tracking visibility
• Carriers control duty collection method (you don't)

Commercial Carriers (FedEx, DHL, UPS)

If you’re shipping to customers via commercial carriers, here’s what you should know::

Pros

• Faster delivery (3–7 days vs. 10–25 days)
• Electronic customs pre-clearance
• Better tracking and fewer lost packages
• Duties calculated transparently upfront
• You can negotiate rates at scale

Cons

• Higher per-unit shipping cost ($8–$15 vs. $1–$3)
• Still subject to tariffs, but these are standard MFN (Most Favored Nations) rates rather than the punitive postal rates
• Requires accounts with each carrier
• Minimum volume commitments

If you ship via FedEx or DHL directly from China warehouses, you'll pay standard MFN tariff rates (typically 15–30% for most goods), not the $200 flat fee. This can actually be cheaper than postal services for products over $10 in value. The math shifts depending on your product price point.

Data Requirements and Certificate of Compliance

The new regulatory environment requires more documentation than before. AliExpress suppliers now need to provide:

10-digit tariff codes

These classify your product for customs purposes. Different codes trigger different duty rates and compliance requirements. A "personal care item" might have one code, a "toy" another, and "apparel" yet another. Misclassification can cause your shipment to be rejected or held indefinitely.

Country of origin labeling

Every product must clearly state "Made in China" or the relevant country. Vague or missing labels are a quick way to get flagged.

Certificates of compliance

For certain product categories (electronics, textiles, toys), importers now need to certify that products meet US safety and consumer standards. AliExpress suppliers are gradually adapting to this, but many don't have the proper certifications yet. Verify with your supplier before sourcing a new product.

Importer information

The party claiming the tariff exemption (or not claiming it, in this case) must be identified. For dropshippers, this is typically you, the seller, or sometimes the customer. Clarify this with your AliExpress supplier before ordering.

If your supplier can't provide these details, move on. Incomplete documentation is a direct path to customs delays and customer complaints.

Direct Impact on Dropshipping Margins and Pricing

Let's talk about what this actually means for your business. The traditional AliExpress dropshipping model relied on thin margins (40–60% markup on a $2–$5 product) working at high volume. New tariffs destroy this math.

Example 1: Low-value product

• Personalized temporary tattoo (cost: $1.50, retail: $8)
• US tariff (flat fee): $200
• Total cost to customer: $208
• Result: Unsellable

Example 2: Mid-value product

• Custom temporary tattoo set (cost: $4, retail: $18)
• US tariff (flat fee): $200
• Total cost to customer: $218
• Result: Unsellable

Example 3: Higher-value product

• Premium custom temporary tattoo collection (cost: $8, retail: $35)
• US tariff (120% ad valorem): $9.60
• Total cost to customer: $44.60
• Result: Marginally viable if shipping costs are absorbed

The pattern is clear: Products under $20 retail are nearly impossible to sell profitably to the US via AliExpress postal shipping. The fixed $200 fee makes them uncompetitive. 

Raising your prices isn't a viable solution. A $50 custom temporary tattoo that costs $8 to source from AliExpress now needs to be $250 retail to cover the $200 tariff and still make a $40 profit. Customers won't pay for it. We’ve just talked about tattoos but the same logic applies to books and other kinds of products as well, if you’re shipping from China to the US and UK.

Compliance Strategies for Staying Legal

Running an AliExpress dropshipping business to the US and UK still works—but only if you follow the rules.

Register your business properly

In the US, you need an EIN (Employer Identification Number) and should register with your state. In the UK, register with HMRC for tax purposes, and register for VAT if your turnover exceeds £85,000.

Declare accurate product values

Never undervalue items on customs forms. It's illegal, it gets flagged, and it causes delays that hurt customers. The $1 you might save on tariffs will cost you $100 in customer refunds when the shipment is held.

Use legit suppliers

AliExpress has plenty of counterfeit products and gray-market goods. If you're not 100% certain a product is genuine, don't sell it. Customs officers are trained to spot fakes. If they do, your shipment is seized and your customer is angry.

Document everything

Keep invoices, supplier contact details, product descriptions, and communications. If customs questions your shipment, you need proof that the products are legitimate and accurately described.

Be transparent with customers

Don't hide duties or surprise shipping costs at checkout. Clearly state that customers may be subject to import duties, and estimate the total landed cost. Many UK and US customers expect this now, and transparency builds trust.

Viable Alternatives to Traditional AliExpress Dropshipping

Given the new tariff environment, here are practical alternatives:

Switch to US/EU Warehousing

Some AliExpress suppliers now offer warehouse options in the US and EU. Products ship from domestic warehouses, which eliminates tariffs and speeds up delivery to 3–5 days. Costs are higher per unit, but total landed costs to customers are often lower once tariffs are factored in. This is becoming the dominant model for serious dropshippers.

Source from US-Based Suppliers

Platforms like Alidrop connect you with US, EU, and Asian suppliers who offer custom branding options and integration with Shopify, Amazon, and eBay. You can source personalized tattoos and custom items directly from US manufacturers, which means zero tariffs, faster shipping, and better product quality control. The per-unit cost is higher, but the total landed cost is often competitive.

Alidrop also features an AI Shopify store builder and a product description generator, which helps you create SEO-optimized listings quickly. Their trending products dashboard shows you what's actually selling, which takes the guesswork out of product selection.

Negotiate Volume Deals with China Suppliers

If you're genuinely committed to AliExpress dropshipping, contact suppliers directly and negotiate rates. Many suppliers will offer better pricing, faster shipping methods, or even partial tariff absorption if you commit to consistent volume. This requires direct communication and relationship-building, but it's doable.

Pivot to High-Margin Products

Focus on items where tariffs are a smaller percentage of total cost. A $100 product with a $200 tariff is a 200% tariff cost—problematic. But a $100 product with a 25% tariff ($25) plus the $200 flat fee ($200 total tariff) is also problematic. The sweet spot is products priced $50+ where margin percentage works even after tariffs.

Data Requirements and What AliExpress Suppliers Should Provide

Before you place an order, your AliExpress supplier should confirm they can provide:

• Product tariff classification codes: 10-digit HS codes specific to your product
• Country of origin details: "Made in China" labeling and proper documentation
• Material composition: Especially for textiles, electronics, or items with restricted materials
• Safety certifications: CE marks for EU, FCC for US electronics, CPSC for consumer products
• Packing slip details: Accurate value declarations and item descriptions
• Supplier contact information: In case customs needs clarification

If a supplier can't or won't provide these details, assume the shipment will face delays. Move to a different supplier or sourcing method.

Long-Term Outlook and Business Decisions

The tariff environment is unlikely to improve in the near term. Political pressure to protect domestic manufacturing and curb cheap imports is bipartisan. Even if the Trump administration changes policy, the underlying infrastructure for tariff collection is now in place and won't disappear.

This means you have three strategic options:

Option 1: Adapt and survive

Pivot to higher-margin products, use US/EU warehousing options, or source directly from US suppliers. This requires upfront investment but positions you for long-term viability.

Option 2: Exit the US market

Focus exclusively on other markets like Canada, Australia, or EU countries where tariffs are lower or more predictable. Your customer base shrinks, but so does complexity.

Option 3: Hybrid model

Keep some AliExpress products for non-tariff markets, but build a parallel US/UK business using domestic suppliers. This diversifies your risk and keeps revenue streams separate.

Most successful dropshippers are choosing Option 1 or 3. The AliExpress arbitrage game is over. The winners will be those who adapt fastest.

Conclusion

The tariff environment isn't going away. Your job is to decide whether you'll adapt or exit. The businesses making deliberate changes right now—pivoting to better suppliers, raising prices on viable products, or investing in domestic sourcing—are the ones that'll thrive in 2025 and beyond. Do you want to dropship from China to the US and UK and navigate compliance smoothly? Try Alidrop today!