The United States has cancelled a long-standing tariff exemption that allowed low-value goods to enter duty-free.
From Friday, parcels worth $800 or less must clear customs and pay tariffs. Millions of shipments daily will face new checks.
In 2023, nearly 1.4 billion packages valued over $64bn entered the US without duties under the de minimis rule, according to customs data.
Analysts warn the change will raise prices, limit choices, and create challenges for small businesses.
Katherine Theobalds, founder of Buenos Aires shoe brand Zou Xou, said: “It might be the end for us.”
The de minimis rule and its impact
Introduced in 1938, the de minimis exemption avoided collecting minor tariffs that were costly to process.
Its rising threshold over the years enabled e-commerce growth and allowed retailers to ship directly to US buyers.
Fast-fashion companies like Shein and Temu relied on it to deliver low-cost goods straight from factories.
Many other businesses, domestic and international, also built their supply chains around the exemption.
Tapestry, owner of Coach, expects a $160m profit loss this year, with one-third tied to the rule’s removal.
More than 90% of US-bound cargo previously benefited from de minimis, according to officials.
Trump and Biden criticised the exemption, saying it hurt American companies and enabled smuggling.
Trump adviser Peter Navarro said ending the policy will reduce fentanyl shipments and bring $10bn to federal revenue annually.
Trump fast-tracked the repeal with an executive order, cancelling the planned 2027 expiry.
Shippers now must pay tariffs by origin or choose a temporary flat fee of $80–$200, available for six months.
China and Hong Kong lost access in May, prompting Temu to halt direct US sales. Letters and gifts under $100 remain exempt.
Slower shipping, reduced selection
Consumers may face fewer products and longer delivery times as businesses adapt.
Smaller exporters must now detail the origin of every material, said logistics expert Tam Nguyen. This adds complexity and slows shipments.
Some niche products may vanish as sellers avoid costly compliance.
Oregon vinyl collector Christopher Lundell had a $5 UK record order cancelled. He called the policy “political theatre” but understood the aim to protect US businesses.
Postal services in Europe and Asia paused US shipments this week, citing uncertainty over the new rules.
Prices set to rise
Tariffs now depend on the country of origin.
Goods from the UK and Australia face 10% duties, while products from Brazil or India may reach 50%.
Flat fees range from $80 for low-tariff nations to $200 for higher-tariff ones.
Officials insist the change will make Americans “safer” and “more prosperous.”
Some US companies welcomed the repeal. Gap Inc. said the exemption allowed competitors to avoid paying 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 orders, warning prices could increase up to 50%. The company will list tariff costs online for transparency.
At Zou Xou, Theobalds said she must rethink her model. “Even if prices remain stable, complex duties may discourage customers,” she said.
China may gain an edge
US retailers like Walmart and Target could benefit if overseas goods become more expensive.
Chinese firms may adapt faster. Shein and Temu operate US distribution centres that soften tariff impacts.
Nguyen said Chinese exporters are already months ahead in mastering paperwork compared to competitors.
For smaller businesses, the repeal ends a low-cost entry into the US market. “That simple pathway is gone,” Nguyen said.
