The United States has ended a tariff exemption that long allowed cheap goods to enter without duties.
From Friday, parcels worth $800 or less face new customs checks and tariff charges. The rule change will affect millions of shipments daily.
In 2023, about 1.4 billion packages valued at over $64bn entered under this exemption, official data shows.
Experts warn prices will climb, choices will shrink, and small businesses will struggle to adapt.
Buenos Aires shoe brand owner Katherine Theobalds fears her firm could collapse. “It might be the end for us,” she said.
The origins of the de minimis rule
The exemption, introduced in 1938, aimed to avoid costly collection of small tariffs.
Its threshold grew over time, powering global e-commerce and enabling companies to ship directly to US customers.
Shein and Temu built their model around this system, offering cheap, fast shipments.
But many foreign and domestic businesses, large and small, used it as well.
Tapestry, the parent of Coach, expects a $160m hit from tariffs, with one-third tied to the rule’s end.
More than 90% of all incoming cargo benefited from de minimis before its repeal, customs data reveals.
Both Donald Trump and Joe Biden criticised the exemption as harmful and open to abuse for drug smuggling.
Trump adviser Peter Navarro argued its end will save American lives by curbing fentanyl imports and add $10bn yearly revenue.
Trump fast-tracked the repeal with an executive order, scrapping the planned 2027 expiry.
Shippers must now either pay origin-based tariffs or a temporary flat fee of $80 to $200. That flat fee will expire in six months.
China and Hong Kong lost access earlier, pushing Temu to halt US shipments. Gifts and letters under $100 remain free of duties.
Fewer products and longer waits
Consumers may face reduced product ranges and delivery delays while companies adjust to new requirements.
Smaller exporters must now track the origin of each material, said logistics consultant Tam Nguyen. That complexity slows shipments.
Niche goods may vanish from listings if sellers decide the paperwork outweighs profits.
Oregon psychologist and record collector Christopher Lundell saw his $5 UK vinyl order cancelled. He called the suspension “political theatre” but said he understands the intent to shield US producers.
Postal services across Europe and Asia paused US deliveries this week, citing uncertainty and lack of preparation time.
Rising costs for importers
Goods now face tariffs based on origin country.
UK and Australian products face 10% duties, while shipments from Brazil or India could reach 50%.
Flat fees range from $80 for low-tariff nations to $200 for high-tariff ones.
Officials insist the move makes Americans “safer” and “more prosperous.”
Some US retailers praised the decision. Gap Inc. said ending the loophole forces rivals to pay their fair share.
But Deborah Elms of Hinrich Foundation warned small sellers face steep audits and courier fees, making price stability difficult.
UK-based Wool Warehouse paused exports to America, its largest market. It warned prices could rise by half and pledged to publish tariff costs online.
Zou Xou’s Theobalds also faces hard choices. “If the duty process feels too complicated, customers may lose interest,” she warned.
Will China gain an advantage?
US retailers like Walmart and Target could benefit as shoppers shift to local options.
But Chinese firms may still profit. Shein and Temu have US distribution centres that soften tariff impacts.
Nguyen said Chinese businesses are already ahead in navigating the paperwork.
For smaller e-commerce players, the repeal closes off an easy entry path. “The low-cost doorway is gone,” Nguyen explained.
