You’ve likely experienced the convenience of ordering an inexpensive item online from an overseas retailer and having it arrive at your door with no surprise fees. That era of easy, low-cost imports under $800 is coming to an end. The White House has announced the suspension of the de minimis exemption, fundamentally changing how low-value imports enter the United States and what you’ll pay for them.
This comprehensive guide will walk you through everything you need to know about this major policy shift, from the mechanics of the new rules to their real-world impact on your wallet and business operations.
What you’ll learn
The history of the $800 rule and why it was ended
How the new tariff rules work for different types of shipments
The real-world cost impact for consumers, importers, and ecommerce brands
Actionable strategies to mitigate costs and stay compliant
Timeline and implementation details for the policy change
TL;DR:
Key takeaways
The Section 321 provision is suspended as of August 29, 2025
Most commercial imports under $800 will now face tariffs
The change is intended to curb illicit goods and level the economic playing field
Businesses need to reassess their supply chain and fulfillment strategies immediately
Consumers should expect higher prices on goods shipped directly from overseas
Quick facts and key dates
The White House ended the U.S. ‘de minimis’ rule on July 30, 2025. Starting August 29, 2025, low-value imports valued at ≤ $800 will no longer enter without duties. Non-postal shipments face all applicable tariffs, while postal parcels will incur a new specific fee or ad valorem duty.
Here are the most critical takeaways about this policy change:
What: The $800 threshold (Section 321 provision) is suspended
Who: An Executive Order was issued to suspend the provision¹
When: The new rules take effect on August 29, 2025
Why: To counter unfair trade practices and curb the flow of illicit goods
Impact: Expect higher costs for low-value imports, especially from online retailers like Shein and Temu
PRO TIP: Mark August 29, 2025, on your calendar if you regularly import goods or operate an ecommerce business. This date represents a fundamental shift in U.S. trade policy that will affect millions of shipments.
What was the de minimis exemption?
To understand the magnitude of this change, we first need to examine what the provision was and why it became so economically significant.
The de minimis provision of the Tariff Act of 1930 allowed shipments valued under a certain dollar amount to enter the United States without duties or formal customs paperwork. Think of it as a “small package exception” designed to streamline customs processing for low-value items that weren’t worth the administrative cost of full inspection and duty collection.
The $800 threshold transformation
The current $800 limit was established in 2016, representing a dramatic increase from the previous $200 threshold. This change coincided perfectly with the explosive growth of ecommerce, creating what many considered an unintended loophole in U.S. trade policy.
The numbers tell the story of this explosion in usage. The number of small shipments grew from 220 million in 2016 to over 1 billion in 2023.² This four-fold increase reflects how fast-fashion retailers, dropshipping businesses, and direct-to-consumer brands built entire logistics models around sending individual, low-value packages directly to American consumers to leverage this advantage.
NOTE: The provision was never intended to handle the volume it reached by 2023. The original rule was designed for occasional small packages, not as a foundation for billion-dollar ecommerce operations.
What exactly is changing?
The $800 rule for most commercial shipments is suspended, but the new rules differ significantly based on how packages are shipped to the United States.
New system for courier shipments
Non-postal shipments arriving via carriers like DHL, FedEx, and UPS are now subject to the standard formal entry process. This means they face all applicable duties and taxes based on the product’s Harmonized Tariff Schedule (HTS) code and country of origin.⁴
These shipments will be charged an ad valorem duty—a percentage of the item’s declared value. For example, a $200 electronics item might face a 15% duty, adding $30 to its landed cost.
New system for postal shipments
Shipments arriving via the international postal network (such as China Post to USPS) face a different tariff structure. These packages will incur either a new, specific fee or the standard ad valorem duty, whichever amount is higher.
What remains unchanged
The rules for bona fide gifts between individuals and personal allowances for travelers are separate policies and remain largely unaffected by this commercial shipment rule change.
| Shipment Type | Old Rule (Before Aug 29, 2025) | New Rule (After Aug 29, 2025) |
|---|---|---|
| Commercial Shipment < $800 (Courier) | No duties or taxes | Full duties and taxes apply |
| Commercial Shipment < $800 (Postal) | No duties or taxes | Specific fee or ad valorem duty |
| Bona Fide Gift | No duties up to $100 | Unchanged |
| Traveler’s Allowance | $800 personal allowance | Unchanged |
ALERT: Business owners should immediately audit any shipments currently in transit. Orders placed before August 29 but arriving after that date will be subject to the new rules.
Why the administration ended the provision
The administration provided several justifications for ending this long-standing trade rule, ranging from national security concerns to economic fairness arguments.
National security rationale
The administration led with its primary concern: the rule was “being exploited by adversaries… to ship illicit materials, such as fentanyl and other synthetic opioids.”³ The argument extends beyond drugs to include counterfeit goods that can pose safety risks to American consumers.
The logic is straightforward: when millions of small packages enter the country with minimal inspection, it creates opportunities for bad actors to exploit the system. By requiring formal customs processing, authorities gain better visibility into what’s actually crossing the border.
Economic fairness argument
Officials said the provision gave foreign companies an unfair competitive advantage over U.S. businesses that must pay duties on their imports. The administration also highlighted the significant lost tariff revenue—estimated in the billions annually—that could fund other government priorities.
From this perspective, American retailers were being undercut by foreign competitors who could ship directly to consumers while avoiding the costs that domestic businesses face when importing similar products through traditional channels.
Political momentum
The action represented the culmination of bipartisan political pressure to close what critics called the “loophole.” Rather than waiting for potentially lengthy congressional action, the administration chose to act unilaterally through executive authority.
NOTE: This policy change enjoys unusual bipartisan support, with both Republican and Democratic lawmakers having previously called for reform, though for different reasons.
Impact analysis
This policy change will create significant, real-world consequences across three key groups: American consumers, online businesses, and the logistics industry.
For U.S. consumers
The most immediate impact will be higher prices for goods purchased from international online retailers. The impact varies by product category. Electronics, textiles, and consumer goods will see the most significant price increases, while some agricultural products may face lower duties.
For online sellers & importers
This represents the most critical business impact of the policy change. The end of the provision means new compliance burdens, higher landed costs, and the need to restructure supply chain operations.
Businesses will need to re-evaluate their reliance on expert 3PL services that can handle the increased complexity of customs compliance. This is especially true for businesses using platforms that now need a 3PL for Shopify with customs expertise and international trade knowledge.
For logistics & carriers
The operational shift from millions of simple, informal entries to complex formal entries will require expanded customs brokerage services, increased paperwork processing, and potentially cause shipping delays as the system adjusts to the new volume.
Carriers will need to invest in additional infrastructure and personnel to handle the formal entry requirements that were previously unnecessary for these shipments.
01
The policy benefits domestic manufacturers and traditional importers by leveling the playing field
02
Increases costs and complexity for consumers and businesses relying on direct international shipping
How to calculate your new duty costs
Understanding your new import costs requires a systematic approach to determining the tariff that will apply to your specific products.
Step 1: Determine the HTS code
Every imported product must be classified under the Harmonized Tariff Schedule (HTS) system. This classification determines the specific duty percentage that applies. The HTS code is a 10-digit number that describes the product in detail, from its material composition to its intended use.
Step 2: Find the duty rate
Visit the official U.S. Harmonized Tariff Schedule website to look up your product’s HTS code and corresponding duty percentage. Rates vary widely—from zero percent for some raw materials to over 25% for certain finished goods.
Step 3: Calculate the duty
Use this simple formula: Duty Payable = (Product Value) × (Duty Rate %).
For example, a $150 shipment of cotton T-shirts with a 16.5% duty results in a $24.75 tariff. Add this to any carrier processing fees and the total additional cost could reach $30-40 per shipment.
Understanding these calculations is essential, but they represent only part of your total fulfillment costs. For a complete picture of your logistics expenses, consider understanding your 3PL pricing structure as well.
OTHER: Quick Tip: Many businesses find it helpful to create a spreadsheet template with their most common products, HTS codes, and duty rates for easy reference when calculating landed costs.
Strategies to mitigate the impact
While costs will rise, businesses can take strategic steps to manage the new regulatory environment through operational and supply chain adjustments.
Shipment consolidation: Move from many small B2C packages to larger, consolidated B2B import shipments to a U.S. fulfillment center. This reduces per-unit costs and simplifies customs processing.
Utilize Foreign-Trade Zones (FTZs): These special economic zones allow companies to import, process, and re-export goods without immediately incurring U.S. duties. Products can be held, assembled, or repackaged before duties are assessed.
Optimize sourcing: Re-evaluate your supply chain by sourcing from countries with more favorable U.S. trade agreements and lower tariff rates. Mexico, Canada, and certain other countries may offer duty advantages.
Partner with a logistics expert: Navigating these complexities requires specialized knowledge. The first step is knowing how to choose a 3PL that specializes in customs compliance and international trade regulations.
PRO TIP: Start implementing these strategies immediately, even before the August 29 deadline. Supply chain changes take time to implement effectively, and early action will give you more options and better terms from service providers.
Industry and expert reactions
The policy change has drawn both strong support and sharp criticism from different segments of the business community.
Proponents
Trade groups representing domestic manufacturers have largely praised the action. The National Council of Textile Organizations (NCTO) called the move necessary to “curb the exploitation of the loophole by China.”⁵ These organizations argue that the change will restore fair competition and protect American jobs.
Opponents
Free-trade advocates and consumer groups have criticized the policy. The Cato Institute argues that ending the provision is effectively “a tax on American consumers” that will lead to higher prices without significantly improving security or supporting domestic manufacturing.⁶
The debate reflects a fundamental tension between protecting domestic industries and maintaining low consumer prices through global trade.
READ MORE: For more perspectives on trade policy impacts, see our analysis of ecommerce fulfillment trends in the post-de minimis environment.
Frequently asked questions
What is the difference between Section 321 and de minimis?
Section 321 is the specific U.S. law that authorizes the provision. The terms are often used interchangeably to refer to the same $800 threshold rule.
How will ending the provision affect prices on Amazon?
It depends on the seller. Third-party sellers who used the rule for direct international shipping will see costs rise, and these costs may be passed on to consumers. Products already stocked in U.S. warehouses won’t be directly affected.
NOTE: The definition of “commercial shipment” versus “personal gift” will become increasingly important. Expect stricter enforcement of these distinctions to prevent abuse of the remaining allowances.
Bottom line and next steps
The end of the provision represents a seismic shift in U.S. import policy, increasing both costs and complexity for millions of shipments annually. However, proactive businesses can minimize disruption through strategic planning and expert partnerships.
For businesses:
Audit your supply chain immediately to identify affected products and shipments
Calculate new landed costs for each product category using the HTS lookup process
The most important step is to review your entire ecommerce fulfillment strategy with a logistics partner experienced in customs compliance
For consumers:
Be aware of potential price increases on goods shipped directly from overseas retailers
Check the “ships from” location and carrier information before making purchases
Consider the total landed cost, including potential duties, when comparing prices
Need personalized guidance on navigating the new tariff landscape? Our customs compliance experts can help you develop a strategy that minimizes costs while ensuring full compliance with the new regulations.
Citations
- Green Worldwide Shipping. “Executive Order Suspends De Minimis for China Imports Effective August 29.” 2025.
- House Select Committee on the CCP. “Interim Report: The De Minimis Loophole and Its Impact on American Competitiveness.” 2024.
- The White House. “Fact Sheet: President Takes Action to Protect American Workers and Businesses from Unfair Trade Practices.” 2025.
- U.S. Customs and Border Protection. “Trade Information Notice Section 321 – Does Not Exceed $800 Aggregated Shipments – Release 2.” 2025.
- National Council of Textile Organizations (NCTO). “NCTO Applauds Administration’s Action to Close De Minimis Loophole for China.” 2025.
- The Cato Institute. “Ending De Minimis Is a Tax on American Consumers.” 2025.
