A significant shift in US trade policy is set to directly impact the wallets of American consumers and the strategies of businesses both large and small. The long-standing de minimis exemption, which allowed imports valued under $800 to enter the United States duty-free, has been officially revoked. This policy change, effective immediately, subjects millions of low-value daily shipments to new tariffs and heightened customs scrutiny.
The current landscape of American e-commerce was significantly shaped by a pivotal legislative change in 2016. Prior to that year, the United States maintained a $200 threshold for duty-free imports, a figure in line with many other nations. This changed with the congressional passage of the Trade Facilitation and Trade Enforcement Act, which dramatically raised the de minimis threshold to $800. According to analysis from the Congressional Research Service, the express intent of this increase was to stimulate economic activity by reducing costs for businesses, providing greater value and choice for American consumers, and bolstering the broader U.S. economy. The move was widely praised for delivering a “significant economic benefit” by streamlining customs and empowering the then-nascent direct-to-consumer import model.
This exemption was a cornerstone of modern e-commerce, enabling the rapid growth of online retailers that specialize in direct-to-consumer shipments. By avoiding import duties on small packages, companies could offer incredibly low prices to US shoppers. The repeal is expected to disrupt this model fundamentally, with industry experts predicting consumers will face higher prices and reduced product availability, particularly affecting small businesses that rely on these supply chains.
The scale of this change is monumental. US Customs data reveals that last year, nearly 1.4 billion packages, valued at over $64 billion, entered the country under this exemption. The move has been strongly advocated by both the Trump and Biden administrations, which criticized the rule for harming American manufacturers and creating a loophole exploited for smuggling illicit goods, including fentanyl. A senior official stated the change will enhance safety and generate approximately $10 billion annually in new government revenue.
The financial implications for corporations are already being calculated. Tapestry, the parent company of Coach, announced it anticipates a $160 million profit hit, with a significant portion attributed to the end of the de minimis rule. While some domestic businesses welcome the change as a way to level the competitive playing field, the immediate aftermath will likely involve widespread adjustment and increased costs across the retail sector.
For shoppers, the new landscape means the final price of goods shipped from abroad will now include applicable tariffs. The cost increase will vary drastically by the product’s country of origin, with rates ranging from 10% to 50%. To manage the transition, shippers have a temporary option to pay a flat fee between $80 and $200 per package for the next six months, a measure designed to give postal services time to adapt.
This policy reversal marks the end of an 86-year-old rule originally designed to avoid the administrative cost of collecting negligible duties. Its termination signals a new chapter in US trade enforcement, one that prioritizes domestic industry protection and security over the unfettered flow of low-cost goods, fundamentally altering the calculus for everyone from global e-commerce giants to the individual US consumer.
