What is changing and when: The United States is ending its long-standing “de minimis” exemption—the rule that allowed low-value imports (under $800) to enter duty-free with minimal customs formalities. Effective August 29, 2025, all countries lose this exemption, marking the end of duty-free entry for packages under $800.1 In practical terms, this means every e-commerce parcel entering the U.S. will now be subject to normal import duties, taxes, and customs clearance procedures, regardless of value. Postal mail shipments get a short-lived exception with a flat per-package duty, but that too phases out after six months and may be even exceed the standard tariff rate depending on the shipment's value.1 This policy shift was foreshadowed on May 2, 2025, when U.S. ended Section 321 de minimis treatment for goods from China and Hong Kong,2 immediately halted duty-free e-commerce parcels from those regions. The global end of de minimis was originally set to take effect on July 1, 2027, under the One, Big, Beautiful Bill Act that was signed into law July 4th.3 But this timeline has now been accelerated. By the end of August, the de minimis loophole will be closed globally.
Who is affected: The impact is sweeping across the e-commerce ecosystem. Brands and merchants that built their fulfillment model on direct cross-border shipping will feel this most. This includes dropshippers, marketplace sellers on platforms like Amazon, eBay, and Etsy, and fast-fashion exporters. Third-party logistics (3PL) providers and fulfillment partners serving these merchants are also affected. Even U.S. brands that manufacture abroad and ship direct-to-consumer (DTC) from overseas warehouses will have to overhaul their approach. In short, any operator who relied on the Section 321 de minimis exception to speed parcels into the U.S. without duties or extensive paperwork is now subject to the full customs regime.
Why this is happening: The end of de minimis aims to address national security threats, trade fairness, & compliance gaps:
U.S. authorities found that the flood of low-value packages made it “impossible” to enforce bans on goods made with forced labor or to catch illegal items. In 2024, over 90% of all U.S. customs enforcement actions (e.g., seizures of contraband, counterfeit, or non-compliant goods) involved de minimis shipments.4 Low-value parcels are used to smuggle fentanyl, counterfeit luxury goods, unsafe electronics, and other contraband in volumes that overwhelmed inspection capacity. A House committee report, for example, noted that platforms like Temu performed zero audits for Uyghur Forced Labor Prevention Act (UFLPA) compliance, allowing goods from prohibited regions to slip in unchecked.5 By ending de minimis, regulators aim to force these shipments into formal review channels, closing what the White House called a security loophole exploited by bad actors.
The de minimis rule, especially at an $800 threshold (one of the most generous in the world), was seen as disadvantageous to American producers and robbing the U.S. of tariff revenue. Low-cost foreign retailers could undercut domestic brands by avoiding import duties on everything from $5 t-shirts to $50 gadgets. Meanwhile, U.S. Customs and Border Protection (CBP) estimates the government lost $3-4 billion in annual tariff revenue due to de minimis in recent years.6 Eliminating the exemption is intended to recapture that revenue and create a more level playing field. U.S. policymakers also pointed to reciprocity: China’s de minimis threshold is effectively only $7, so American exports face duties in China while Chinese exports enjoyed duty-free entry into the U.S. Closing the loophole is viewed as addressing an asymmetry in trade practices.
Beyond tariffs, the de minimis flood exposed gaps in compliance with various import laws. Everything from product safety certifications, FDA regulations (for supplements, cosmetics, etc.), to intellectual property enforcement was harder to police with millions of small packages skirting formal entry. 97% of counterfeit product seizures in 2024 were in de minimis shipments, amounting to over 30 million fake items seized.7 By requiring formal customs entry for all goods, authorities expect better oversight on product safety and legality. In short, the policy shift is meant to force e-commerce imports “out of the shadows” and into full compliance with import laws.
The scale of the change: To grasp how dramatic this shift is, consider that CBP processed over 1.36 billion de minimis packages in FY2024, averaging 4+ million parcels per day.8 These low-value parcels made up an estimated 92% of all U.S. import entries by volume.9 The $800 threshold (raised from $200 in 2016) supercharged cross-border e-commerce, causing shipments to balloon from 220 million in 2016 to over a billion by 2024, fueled largely by direct-from-factory sales from Asia. Two Chinese giants, Shein and Temu, were shipping about 600,000 packages per day to U.S. customers at the height of this trend.10 All of that is now subject to duty and delay. In effect, the Wild West period of virtually unchecked small-parcel imports is ending, ushering in a new era where importing even a $10 trinket requires jumping through hoops that used to apply only to big commercial shipments.