July 31, 2025
For those who were not aware, here is a brief explanation of what ‘De Minimis’ means..
If you are based in the USA and have ever ordered a small item from overseas, say a phone case, a piece of costume jewellery, or an art print worth under $800, it likely came into the United States duty-free under what was known as the de minimis provision..
The de minimis threshold (set under Section 321 of the U.S. Tariff Act) allowed low-value imports under $800 to enter the U.S. without incurring customs duties or taxes, provided the goods were consigned to an individual recipient and met certain conditions..
It was originally intended to ease administrative burdens for U.S. Customs and Border Protection (CBP), streamline trade, and support small businesses engaging in e-commerce..
But on August 29, 2025, this decades-old provision will officially meet its end..!! R.I.P De Minimis..
What triggered this action..??
A Presidential Executive Order issued today, July 31, 2025, suspended de minimis treatment for all countries, citing national security, trade fairness, and law enforcement concerns..
Let us unpack that a bit..
- Massive abuse of the system: Over 85% of de minimis entries originated from China, many valued at under $5, raising red flags on under-invoicing, misdeclaration, and loophole exploitation..
- Illicit shipments: A staggering 90% of fentanyl seizures occurred through de minimis shipments, highlighting gaps in oversight..
- Country of origin ambiguity: Postal packages often arrived without a clear declaration of the Country of Origin (COO), further weakening compliance.. The CN22 label managed under the UPU, for instance, routinely left COO fields blank..
What changes now..??
From August 29, 2025, most low-value commercial shipments (except postal mail) will no longer benefit from de minimis treatment.. This means:
- All non-postal e-commerce imports, even under $800, will now attract duties..
- Carriers (not consumers) will be the responsible party for declaring and paying duties to CBP, although it is unlikely they will absorb the cost..
- Two tariff calculation options will apply to each shipment:
- IEEPA reciprocal tariff (based on origin country), or
- A fixed tariff per item:
- $80 per item (if IEEPA tariff < 16%)
- $160 per item (if IEEPA tariff is 16–25%)
- $200 per item (if IEEPA tariff > 25%)
Carriers must choose one method per month and stick with it for all their shipments, with only a 24-hour notice to CBP if switching methodology..
Why should American consumers care..??
Because this is not just a regulatory footnote, it will hit your wallet..
- Expect price hikes on popular online platforms like Temu, Shein, AliExpress, and others that relied heavily on de minimis entries to keep prices rock bottom..
- Small-value goods like accessories, electronics, and hobby supplies could now cost significantly more due to tariffs being levied per item, regardless of actual value..
- Even if retailers absorb some of the tariff costs upfront, you may find those costs baked into shipping, handling, or hidden fees..
What about exporters shipping into the U.S..??
This policy change delivers a major blow to small and medium exporters around the world who built their business models around frictionless access to American consumers via the de minimis provision..
- Those exporting from countries like Vietnam, India, Mexico, or China will need to recalibrate pricing structures and reassess profitability on small orders..
- Clear and accurate Country of Origin declarations will become non-negotiable.. Ambiguities, especially in the postal channel, will be a key enforcement focus area for CBP..
- Global trade could tilt in favour of larger retailers or consolidated shipping solutions with better compliance capacity, edging out informal micro-shipments..
Why it matters more than you think..
While the narrative around de minimis has largely focused on China and narcotics, this is also a turning point in how digital-era trade is governed.. There are legitimate reasons to close loopholes and secure borders, but there is also a cost in lost access, higher consumer prices, and disrupted micro-export economies..
This change is not just regulatory housekeeping, it is a reshuffling of trade pathways..
What next..??
US consumers and also global traders must
- Watch how carriers react, they are now central players in this compliance shift..
- Expect consumer awareness campaigns, particularly from e-commerce giants preparing for pricing backlash..
- Monitor CBP enforcement patterns, especially around misdeclared shipments and non-compliant postal entries..