The United States has ended a long-standing tariff exemption that allowed imports under $800 to enter duty-free, reshaping global e-commerce.
Starting Friday, parcels under this threshold face customs inspections and tariffs. Millions of shipments daily will be affected.
Customs data shows that in 2023 nearly 1.4 billion packages worth more than $64bn arrived under the de minimis rule. Experts warn prices will rise, choices will shrink, and small businesses will face major challenges.
Katherine Theobalds, founder of Buenos Aires shoe brand Zou Xou, said: “It might be the end for us.”
The role of de minimis
The de minimis exemption began in 1938 to avoid collecting minor tariffs that cost more to process than they generated.
Over time, the threshold increased, supporting e-commerce growth and enabling retailers to ship directly to US buyers.
Companies like Shein and Temu relied on the exemption to deliver low-cost goods straight from factories.
Many other domestic and international businesses also built supply chains and pricing models around it.
Coach parent Tapestry expects a $160m profit hit this year, with one-third tied to the exemption’s removal.
Officials report that over 90% of US-bound cargo previously benefited from de minimis.
Both Donald Trump and Joe Biden criticised the policy, saying it harmed US businesses and allowed smuggling.
Trump adviser Peter Navarro said ending it will reduce fentanyl shipments and add $10bn annually to federal revenue.
Trump fast-tracked the repeal through executive order, cancelling its planned 2027 expiry.
Shippers now must pay tariffs by origin country or choose a temporary flat fee of $80–$200 per package for six months.
China and Hong Kong lost the exemption in May, prompting Temu to halt direct US sales. Gifts and letters under $100 remain exempt.
Slower shipping, reduced choice
Consumers may see fewer products and longer delivery times as businesses adjust.
Smaller exporters must now declare the origin of every material, said logistics expert Tam Nguyen. That adds complexity and delays shipments.
Some niche items may disappear as sellers avoid compliance costs.
Portland vinyl collector Christopher Lundell had a $5 UK record order cancelled. He called the change “political theatre” but recognised the need to protect US firms.
Postal services across Europe and Asia paused shipments to the US, citing uncertainty over the new rules.
Rising costs for buyers
Tariffs now depend on the country of origin.
Goods from the UK and Australia face 10%, while shipments from Brazil and India may reach 50%.
Flat duties range from $80 for low-tariff nations to $200 for higher-tariff ones.
Officials argue the change strengthens the economy and improves safety for Americans.
Some US companies welcomed the policy. Gap Inc. said closing the loophole forces all importers to pay fair duties.
Trade expert Deborah Elms warned small firms face costly audits and may turn to expensive couriers, raising prices further.
UK retailer Wool Warehouse paused US shipments, warning prices could rise up to 50%. The company plans to show tariffs online for transparency.
At Zou Xou, Theobalds said she must rethink her business model. “Even if prices stay stable, complex duties may discourage buyers,” she explained.
China may benefit
US retailers like Walmart and Target could gain if imported goods become more expensive.
Chinese firms may adapt faster. Shein and Temu have US distribution centres to reduce tariff impacts.
Nguyen said Chinese exporters are months ahead in managing paperwork compared with competitors.
For smaller businesses, the exemption’s repeal closes an easy pathway to the US market. “That low-cost entry point is gone,” Nguyen said.
