The most immediate hit is financial. Every formerly duty-free shipment will now incur import charges based on product category, with a 10% baseline tariff rate.11 Apparel is hit harder with an average rate of 23.8%.12 And for most Chinese imports, total tariffs can be up to 145%.13 Landed costs are rising across the board, by anywhere from a few percent on low-tariff items up to double or triple the cost for goods from countries facing punitive rates. On top of government tariffs, brands must also budget for new brokerage and handling fees from carriers and customs brokers, which can easily add another $10-$20 to each parcel. Some postal consolidators and courier services that previously offered cheap Section 321 delivery might even transition customers to more expensive formal import services.

Operationally, the end of de minimis introduces friction at multiple points in the supply chain. Importers will be required to file formal customs entries for low-value goods. This includes generating HS codes, providing commercial invoices with precise declared values, and in many cases, submitting formal entry documentation (CBP Form 7501) even for a $50 item. Smaller businesses that previously never dealt with customs will need to learn fast or hire brokers. With millions of additional shipments now subject to these formal customs processes, delays will become the new normal. Signs of strain are already visible. During an initial attempt to revoke de minimis in February, USPS temporarily stopped accepting packages from China as customs systems crashed under the surge of formal entries.14 Then, in the trial run in May when Chinese packages lost de minimis status, average delivery times jumped from around 7-10 days to 14-21 days due to customs bottlenecks. Brands should anticipate that shipments coming from abroad will face unpredictable clearance times, at least until new systems and staffing are properly in place. While CBP has since upgraded systems, some hiccups and learning curve delays are likely in the first weeks and months post-implementation. Brands will need to build in extra lead time and contingency plans to protect the customer experience and prevent their reputation from becoming a casualty of this new era of trade.

The repeal of de minimis is set to reshape the competitive landscape of retail and e-commerce, in many ways leveling the playing field for domestic brands. Foreign sellers that once relied on duty-free shipping to offer ultra-low prices must now factor in tariffs, reducing their cost advantage. This creates an opportunity for U.S.-based retailers and brands to reclaim market share. Products made or warehoused in the U.S. are now more price-competitive as imported alternatives become more expensive. In the weeks after the initial de minimis crackdown, shoppers who pulled back from Temu and Shein redirected spending at stores like Old Navy, Nordstrom Rack, Ulta Beauty, and even resale outlets, seeking affordable alternatives.15 However, this competitive dynamic can cut both ways. Large global companies have the resources to open new U.S. warehouses and potentially absorb new costs in the interim. In contrast, smaller DTC brands that relied on Chinese manufacturers and dropshipping may struggle with rising costs. But regardless of size, those that adapt quickly can still compete and even win. U.S. brands that act fast stand to benefit from a more level playing field. In the end, agility will determine who gains and who loses in this new chapter of global retail.

With higher costs and slower deliveries on the horizon, customer experience is at risk. American consumers have been spoiled by years of cheap or even free shipping from overseas, often receiving a $5 item in a week or less. Now, as shipping times lengthen and many retailers start adding tariff surcharges at checkout, consumers could react with frustration or by seeking alternatives. Nearly 40% of online shoppers16 are likely to abandon their carts when faced with these extra tariff and duty surcharges at checkout. Early evidence showed significant “sticker shock” when Chinese platforms began tacking on tariff fees, leading to a rapid slowdown in sales growth for Temu and Shein in spring 2025.17 Another churn driver is delivery reliability. If parcels get stuck in customs and miss their promised delivery windows, expect complaints, refund requests, and even chargebacks to spike. Customers may not understand why an item that used to come in 5-7 days now takes 3 weeks. Clear communication (addressed in a later section) will be key to mitigating this. If your brand’s value proposition was primarily “cheapest option” and that is no longer true after adding duties, you may see customers defect unless you can pivot on value or experience. With this upheaval, customer loyalty will be tested. Brands must be proactive to prevent mass churn by adjusting their customer experience strategies (more on that below).