The United States has ended a long-standing tariff exemption that allowed imports under $800 to enter duty-free.
Starting Friday, small parcels will face stricter customs checks and tariffs, affecting millions of shipments daily.
In 2023, about 1.4 billion packages valued over $64bn arrived in the US under this rule, according to customs data.
Experts warn the change will push up prices, reduce options for consumers, and challenge small businesses.
Katherine Theobalds, founder of Buenos Aires shoe brand Zou Xou, said: “It might be the end for us.”
De minimis and its role in trade
The de minimis exemption began in 1938 to avoid collecting tiny, costly tariffs.
Over decades, the threshold increased, fueling e-commerce growth and enabling direct-to-consumer shipping.
Companies like Shein and Temu used the exemption to deliver low-cost products straight from factories to US buyers.
Many other domestic and international firms also relied on the rule for their supply chains and sales strategies.
Coach parent Tapestry expects a $160m profit loss this year, with one-third linked to the exemption’s removal.
More than 90% of US-bound cargo previously benefited from de minimis, officials said.
Trump and Biden criticised the policy, saying it harmed US businesses and enabled smuggling.
Trump adviser Peter Navarro argued ending it will reduce fentanyl shipments and add $10bn annually to federal revenue.
Trump fast-tracked the repeal with an executive order, cancelling the scheduled 2027 expiry.
Shippers now must pay tariffs by origin or choose a temporary flat fee of $80–$200 per package, available for six months.
China and Hong Kong lost the exemption in May, prompting Temu to halt direct US sales. Personal gifts and letters under $100 remain duty-free.
Slower deliveries and limited choices
Consumers may see fewer products and longer delivery times as businesses adapt.
Small exporters must now document every material’s origin, said logistics expert Tam Nguyen. This adds complexity and slows shipments.
Niche products may disappear as sellers avoid costly compliance.
Portland vinyl collector Christopher Lundell had a $5 UK record order cancelled. He called the suspension “political theatre” but understood the goal to protect American companies.
Postal services in Europe and Asia paused US deliveries this week due to uncertainty about the new rules.
Costs set to rise
Tariffs now depend on country of origin.
Goods from the UK and Australia face 10%, while products from Brazil and India may reach 50%.
Fixed fees range from $80 to $200 depending on tariff rates.
Officials say the policy will make Americans “safer” and “more prosperous.”
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.
British retailer Wool Warehouse paused US orders, warning prices could rise by 50%. The company will show tariffs online for transparency.
At Zou Xou, Theobalds said she must rethink her approach. “Even if prices stay similar, complex duties may discourage buyers,” she said.
China may benefit
US retailers like Walmart and Target could gain if imported goods become expensive.
Chinese firms may adapt faster. Shein and Temu have US distribution centres to reduce tariff costs.
Nguyen said Chinese exporters are months ahead in handling customs paperwork compared with other countries.
For smaller sellers, the exemption’s removal ends an easy path into the US market. “That low-cost entry point is gone,” Nguyen said.
