Heads up, online shoppers and small business owners! The duty-free days for low-value imports are officially over in the US. Get ready for new customs rules and potential tariffs on your international parcels. How will this shake up your online purchases?
The United States is implementing a significant shift in its international trade policy this week, as low-value imports officially lose their duty-free status. This change, stemming from an executive order by former President Donald Trump, is a strategic move designed to reduce the nation’s reliance on foreign goods and rebalance global trade dynamics through the application of tariffs.
The executive order, signed last month, specifically targets and eliminates a long-standing customs exemption for international shipments valued at $800 or less. This policy adjustment takes effect much earlier than initially anticipated, nearly two years ahead of the deadline previously established by congressional tax cuts and spending legislation.
For countless small businesses and individual online shoppers across the nation, this policy reversal marks a substantial departure from previous norms. While President Trump had previously revoked the de minimis rule for inexpensive items originating from China and Hong Kong, the expansion of import taxes to cover small parcels from virtually all other countries is set to introduce considerable changes to their purchasing and operational models.
Goods that once entered the U.S. without the need for extensive customs clearance will now be subjected to rigorous vetting processes. Furthermore, these parcels will incur the applicable tariff rate of their country of origin, which can vary significantly, ranging anywhere from 10% to 50% of the item’s value. For a transitional period of six months, carriers managing orders through the global mail network will also have the option to levy a flat duty of $80 to $200 per package, offering an alternative to the value-based rate.
In response to these new requirements and the resulting confusion over processing and payment protocols, several national postal services globally have announced temporary suspensions. More than a dozen countries have indicated they will temporarily halt sending some or most packages bound for the U.S., highlighting the immediate international impact of the policy.
The Trump administration justified the elimination of this customs exemption by arguing that it had evolved into a significant loophole. According to the administration, foreign businesses exploited this loophole to circumvent tariffs, while illicit actors used it as a conduit for introducing drugs, counterfeit products, and other contraband into the United States. Discussions on this issue had also taken place with former President Joe Biden and members of Congress.
Globally, similar de minimis exemptions exist, but the U.S. threshold of $800 was notably higher than in many other developed nations. For instance, the 20 European Union countries utilizing the euro typically cap their value limit at $175, while the United Kingdom permits foreign businesses to send parcels valued up to $182 without incurring tariff charges.
The de minimis exemption, Latin for “lacking significance or importance,” originated in the U.S. in 1938. Its initial purpose was to spare the federal government the administrative burden and cost of collecting duties on imported goods worth $1 or less. Over time, U.S. lawmakers progressively increased this eligibility cutoff, reaching the $800 mark in 2015, as documented by the Congressional Research Service.
Advocates for restricting the exemption contend that it facilitated the entry of low-priced goods into the U.S. market, particularly from China-founded retail platforms such as Temu and Shein. Organizations like the National Council of Textile Organizations have publicly stated that ending this exemption is crucial for closing what they describe as a “backdoor pipeline for cheap, subsidized, and often illegal, toxic and unethical imports,” aiming to foster fairer trade practices and support domestic industries.
