Number of countries suspending parcel shipments to the US grows to 25!More than £8bn wiped off British banks over Reeves tax raid fears! Electric cars eligible for £3,750 discount announced
- TBA
- Sep 1
- 4 min read
Number of countries suspending parcel shipments to the US grows to 25
According to the tariff plan previously announced by US President Donald Trump, starting August 29, 2025, the United States will suspend duty-free treatment for imported parcels valued at $800 or less. After this date, all small parcels will be subject to customs duties based on their country of origin: 10% tariff for UK products, 15% tariff for EU products.
However, gifts valued under $100, as well as ordinary letters and greeting cards, will remain duty-free.
Last week, major European postal operators, including Royal Mail, announced that they will suspend parcel deliveries to the United States. The Universal Postal Union (UPU) stated that, as of August 26, the number of countries deciding to halt parcel shipments to the US had increased to 25, due to the impact of this new policy.
To address the changes, Royal Mail launched a new service on August 28—“US Postal Delivered Duties Paid”—which aims to keep postage rates unchanged while applying a £0.50 customs clearance fee per parcel.
This policy is expected to significantly impact global cross-border e-commerce. Last year alone, approximately 1.4 billion small parcels (with a total value exceeding $64 billion) entered the US under this duty-free policy. For sellers relying heavily on low-value exports, the additional tariffs and procedures will undoubtedly increase costs and complexity.
Some companies have expressed concerns over numerous uncertainties, such as who will be responsible for paying the duties, how the payments will be processed, and what additional data will be required.
Meanwhile, the value of small parcels sent from China to the UK without import tax more than doubled in 2024—from £1.3 billion in the 2023-24 fiscal year to approximately £3 billion, accounting for 51% of all small parcels shipped to the UK globally last year.
Currently, the UK exempts import duties on goods valued at £135 or less. However, due to the competitive pricing of e-commerce platforms such as Temu and Shein, the UK government is reviewing its tax regulations to protect domestic retailers from aggressive low-cost competition.
More than £8bn wiped off British banks over Reeves tax raid fears
Last week, fears that Chancellor Rachel Reeves may introduce a new tax on banks to fill gaps in public finances caused the market value of major UK banks to drop by over £8 billion, with listed bank shares falling by as much as 2.7%.
NatWest suffered the largest drop, falling 5.9%, which wiped out £2.1 billion in value.
Lloyds Bank and Barclays shares fell by 5.3% and 4.3%, respectively.
HSBC also saw a decline of 1.3%.
The market reacted to speculation that the Treasury may target commercial banks’ reserves held at the Bank of England by imposing a new tax. According to estimates by the Institute for Public Policy Research (IPPR), this measure could raise around £8 billion annually. Last year, the UK banking sector already contributed nearly £45 billion in taxes.
The UK Finance trade association has warned that banks already pay a corporation tax surcharge and bank levy, and an additional tax could weaken the UK financial sector’s global competitiveness. Lloyds CEO Charlie Nunn also warned that any increase in tax burden would offset previous benefits from lighter regulation.
Former RBS Chairman Sir Philip Hampton was even more direct: “Imposing more taxes on banks will only reduce their capacity to lend and invest, which is economically unwise.”
The UK government has been under significant fiscal pressure this year. Deputy PM Angela Rayner previously suggested raising corporate taxes on banks, which could generate £3–4 billion annually.
Meanwhile, the Reform UK party has proposed scrapping interest payments made by the Bank of England on commercial banks’ reserves, claiming it could save £35 billion, but BoE Governor Andrew Bailey dismissed the proposal, saying it effectively amounts to a bank tax.
Analysts note that, with the Autumn Budget approaching, markets should expect more trial balloons regarding new taxes, and investors will need to adapt to repeated shifts in policy expectations.
Electric cars eligible for £3,750 discount announced
The UK Department for Transport has confirmed that, as part of its plan to reduce petrol and diesel car usage, it will roll out a £650 million electric vehicle subsidy program, offering discounts of up to £3,750 on selected EV models.
The subsidy applies to new models priced at £37,000 or less. Additionally, 26 models will qualify for a £1,500 discount. Manufacturers can apply for the subsidy, and the discount will be automatically applied at the point of sale.
Currently, the two models eligible for the £3,750 discount are:
Ford Puma Gen-E (priced at £28,495)
Ford e-Tourneo Courier (£32,190)
In addition, 26 other EV models qualify for the £1,500 subsidy.
Although the UK government has pledged to ban the sale of new petrol and diesel cars from 2030, many drivers still consider high upfront costs the main barrier to EV adoption. There are also widespread concerns about the lack of charging infrastructure. Currently, there are about 1.3 million EVs on UK roads, but only 82,000 public charging stations.
Online automotive marketplace Autotrader stated that this new incentive is expected to trigger the highest level of EV demand in the past three years.
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