The United States has ended a decades-old tariff exemption that let parcels under $800 enter duty-free, reshaping online shopping.
From Friday, small shipments will face customs inspections and tariffs. Millions of packages each day will be affected.
Customs data shows that in 2023 nearly 1.4 billion packages worth over $64bn entered the US under the de minimis rule. Experts warn prices will rise, consumer choice will shrink, and small businesses will struggle.
Katherine Theobalds, founder of Buenos Aires shoe brand Zou Xou, said: “It might be the end for us.”
The role of the de minimis exemption
The de minimis exemption started in 1938 to avoid collecting small tariffs that cost more than they generated.
Its rising threshold over decades supported e-commerce growth and allowed retailers to ship directly to US consumers.
Companies like Shein and Temu relied on it to deliver low-cost products 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 linked to the rule’s removal.
Officials said over 90% of US-bound cargo previously benefited from de minimis.
Both Donald Trump and Joe Biden criticised the policy, saying it hurt US firms 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 the planned 2027 expiry.
Shippers must now pay tariffs by origin country or choose a temporary flat fee of $80–$200 per parcel for six months.
China and Hong Kong lost the exemption in May, prompting Temu to halt US sales. Gifts and letters under $100 remain exempt.
Fewer products, slower shipping
Consumers may see limited options and longer delivery times as businesses adjust.
Small exporters must now declare the origin of every material, said logistics expert Tam Nguyen. That adds complexity and slows shipments.
Some niche products may disappear as sellers avoid compliance costs.
Portland vinyl collector Christopher Lundell had a $5 UK record order cancelled. He called the move “political theatre” but understood the aim to protect US firms.
Postal services across Europe and Asia paused shipments to the US this week due to uncertainty over the new rules.
Rising costs for buyers
Tariffs now vary by country of origin.
Goods from the UK and Australia face 10%, while shipments from Brazil or India may reach 50%.
Flat duties range from $80 for low-tariff nations to $200 for higher-tariff ones.
Officials say the policy will strengthen the economy and improve safety for Americans.
Some US companies welcomed the change. Gap Inc. said closing the loophole ensures all retailers pay fair duties.
Trade expert Deborah Elms warned small firms face costly audits and may rely on expensive couriers, raising prices further.
UK retailer Wool Warehouse paused US shipments, warning prices could rise 50%. The company will 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 expensive.
Chinese firms may adapt faster. Shein and Temu operate US distribution centres to reduce tariff costs.
Nguyen said Chinese exporters are months ahead in managing customs paperwork compared with competitors.
For smaller businesses, the repeal removes a low-cost entry path. “That easy way into the US market is gone,” Nguyen said.
