How will the new U.S. small parcel tax affect your packaging choices?

For many UK and EU eCommerce brands, the United States is a vital market. With a population of over 330 million people and a strong appetite for international products, it’s no surprise that so many businesses prioritise U.S. sales. But in 2025, a new challenge has emerged: the U.S. small parcel tax.

This new fee applies to goods shipped from overseas into America, and it’s already creating concern among retailers, fulfilment teams, and logistics managers. The big question is: how will the small parcel tax affect your business and what can you do to minimise its impact?

At Lil Packaging, we believe the answer lies in smarter, more efficient, and more sustainable packaging. Let’s explore why.

The small parcel tax is a duty applied on shipments entering the U.S. from abroad. Unlike traditional import tariffs that usually depend on the product category, this new tax specifically targets parcels under a certain size and weight threshold.

Why does it matter?

1. It applies to the kind of shipments most eCommerce brands rely on.
2. It increases the landed cost of every sale.
3. It adds another layer of complexity to international trade at a time when costs are already high.

For small and medium-sized brands, this isn’t just another line on the balance sheet — it’s a margin killer.

The U.S. small parcel tax has one immediate effect: shipping to the U.S. just got more expensive. And when every shipment costs more, even small inefficiencies in packaging start to add up.

Think about it:

A box that’s 10% larger than it needs to be may push you into a higher pricing bracket.

Excess void fill (like bubble wrap or air pillows) adds both weight and cost.

Inefficient packaging means fewer parcels fit in a container, raising freight costs.

In this new environment, brands can no longer afford to ship “air.”

Here’s how the tax could affect businesses that don’t adapt:

1. Higher per-shipment costs. Each parcel entering the U.S. is taxed.
2. Wasted space = wasted money. Oversized packaging makes the parcel heavier and bulkier than necessary.
3. Reduced competitiveness. U.S. consumers may look elsewhere if overseas sellers inflate their prices to cover taxes and shipping.
4. Environmental impact. More packaging and more weight mean higher carbon emissions, which brands are increasingly pressured to reduce.

The cycle is clear: poor packaging efficiency amplifies the pain of the new tax.

At Lil Packaging, we’ve been helping eCommerce brands reduce waste, speed up fulfilment, and cut costs for decades. The introduction of the small parcel tax simply makes our mission even more urgent.

Here’s how our solutions help:

1. Right-Sized Packaging

Our Breezeboxes, book wraps, and ecommerce boxes are designed to hug the product closely. That means no wasted space and no paying to ship empty air.

2. No Void Fill Needed

Traditional packaging often relies on void fill to protect products. Lil Packaging’s designs eliminate the need for this entirely, saving weight and money.

3. Faster Fulfilment

Our patented designs, such as Breezepaper, reduce packing time dramatically. Faster fulfilment = lower labour costs, which offsets the impact of higher shipping fees.

4. Sustainable Materials

All of our packaging is plastic-free, recyclable, and FSC®-certified. Consumers in the U.S. are increasingly eco-conscious, so sustainable packaging doesn’t just save money — it builds brand loyalty.

Let’s say you ship 1,000 parcels per month from the UK to the U.S.

With traditional oversized boxes and void fill, the average weight per parcel is 600g.

By switching to Lil Packaging’s Breezebox and right-sized boxes, the average weight drops to 500g.

That 100g saving might seem small, but across 1,000 parcels, it’s 100kg less weight shipped each month. Under the small parcel tax, that could mean hundreds of pounds saved in duties and freight charges.

Multiply that over a year, and the impact is massive.

The U.S. small parcel tax isn’t going away. If anything, it signals a broader trend: governments are looking to raise revenue from international eCommerce. Businesses that adapt early will protect their margins and gain an advantage over slower competitors.

By optimising your packaging now, you:

1. Reduce per-shipment costs immediately.
2. Build resilience against future taxes and tariffs.
3. Strengthen your sustainability credentials.
4. Delight customers with packaging that’s easy to open, easy to recycle, and eco-friendly.

Key Takeaways

- The U.S. small parcel tax increases the cost of shipping to America for UK and EU businesses.

- Inefficient packaging magnifies the problem - wasted space and weight = higher landed costs.

- Lil Packaging’s right-sized, plastic-free, void-fill-free designs help brands ship smarter, leaner, and greener.

The result: lower costs, faster fulfilment, and happier customers.

If your business depends on the U.S. market, the small parcel tax is a wake-up call. Now is the time to re-think packaging strategy, not just for compliance, but for long-term competitiveness.

At Lil Packaging, we’re ready to help you adapt. From reducing weight and volume to eliminating plastic and speeding up your packing line, our innovations are designed for exactly this challenge.

Don’t pay to ship air. Ship smarter. Ship Lil.