Published by Global Banking & Finance Review®
Posted on August 29, 2025
5 min readLast updated: January 22, 2026
The US ended duty-free imports under $800, impacting global retailers and increasing costs for US shoppers. This change addresses drug trafficking concerns and levels the playing field for US businesses.
By Arriana McLymore and Helen Reid
NEW YORK -The U.S. administration on Friday ended duty-free imports of packages worth less than $800, known as the "de minimis" exemption, a decision that increases costs for retailers around the world selling to the U.S. and will likely cause prices to rise for American shoppers.
President Donald Trump announced on July 30 the repeal of the duty-free treatment of parcels from every country, effective a month later.
With this, the administration has expanded a decision in May to impose tariffs on these shipments from China and Hong Kong, affecting retailers such as Shein and Temu, which primarily ship from China.
Here's what the latest step means for U.S. buyers as well as some small U.S. businesses that work with overseas suppliers.
WHAT ARE THE REASONS?
The Trump administration has cracked down on de minimis because it says the exemption has enabled traffickers to easily send parcels containing fentanyl into the country.
U.S. retailers and industry groups also opposed the exemption in the belief it gave an unfair advantage to foreign e-commerce companies, such as Shein and Temu, as well as some third-party sellers on Amazon. Amazon, Shein and Temu declined to comment.
Prices of merchandise at Walmart or Target already reflect tariffs paid by the retailers when they import the goods, making them comparatively more expensive.
WHAT DOES IT MEAN?
The de minimis exemption enabled a cross-border ecommerce surge as U.S. shoppers snapped up bargains, including $12 dresses on Temu. Until May 2, orders landed on their doorsteps free of duties provided their packages were valued at less than $800.
In fiscal 2024, 1.36 billion shipments arrived under de minimis with a declared value of $64.6 billion.
According to U.S. government data, about 73% of de minimis packages entering the U.S. originated from China in 2024.
Letters and gifts worth less than $100 sent to the U.S. by individuals will still be exempt from duties under the new rules.
WHICH COUNTRIES ARE MOST AFFECTED?
Canada, Mexico and the United Kingdom are the next biggest senders, according to CBP figures. Logistics provider Red Stag Fulfillment said other significant sources include India, South Korea, Thailand and Vietnam.
Since the China exemption was eliminated on May 2, de minimis volumes have fallen by about a third, Red Stag said.
Small British businesses selling online to U.S. shoppers have already alerted customers to price increases. Sewing pattern and fabric company Merchant & Mills, for example, announced in an Instagram post that it would increase its U.S. prices by 15% to cover duties.
WHAT ARE THE RIPPLE EFFECTS?
The change has caused turmoil in postal services across the world, with Australia Post, Germany's Deutsche Post, Japan Post, Korea Post and others pausing shipments to the U.S. as they work to adapt.
Britain's Royal Mail resumed shipments on Thursday, saying customers can send parcels using a "postal delivery duties paid" service, paying any duties upfront, as well as a handling fee to cover additional costs of clearance into the U.S..
"It's very challenging for the post to go into an environment where they have tU.S..lect duties, when they've never collected duties," said Clint Reid, founder and CEO at Zonos, whose software helps businesses calculate, collect and remit duties.
U.S. Customs and Border Protection said it was taking the necessary actions to implement the order.
The new tariff regime will also increase paperwork for sellers as U.S. customs requires information on the origin and type of goods in packages.
In February, the Trump administration paused its initial ban on de minimis shipments from China as packages piled up at U.S. customs, and granted more time before the change took effect.
WHAT DOES IT MEAN FOR ONLINE RETAILERS?
Ecommerce giants Shein and Temu have had time to adapt to the change since May. While prices on Shein have started to increase, the latest change may put it in a better position than some rivals, said Yao Jin, associate professor of supply chain management at Miami University.
"It is now economical to ship out of China on a relative basis, simply because the cost of shipping direct from other countries has also risen," Jin said.
HOW ARE SMALL BUSINESSES AFFECTED?
It's harder for small businesses to absorb tariffs, and some plan to increase their prices to offset tariff costs.
Platforms like eBay and Etsy, where individuals and small businesses sell anything from vintage soccer shirts to electronics, have advised sellers to communicate with their customers about tariff-related price increases.
(Reporting by Arriana McLymore in New York, Helen Reid in London, Additional reporting by Josephine Mason, editing by Nupur Anand, Cynthia Osterman and Barbara Lewis)
The de minimis exemption allowed duty-free imports of packages valued under $800, facilitating cross-border ecommerce and enabling U.S. shoppers to purchase goods without additional fees.
The Trump administration ended the exemption to combat drug trafficking, particularly fentanyl, and to address concerns that it gave foreign e-commerce companies an unfair advantage.
With the end of the de minimis exemption, U.S. consumers can expect price increases on goods imported from overseas, as retailers will likely pass on the additional tariff costs.
The countries most affected include China, Canada, Mexico, and the United Kingdom, with a significant number of de minimis packages previously originating from China.
Small businesses may struggle to absorb the increased costs from tariffs and may need to raise prices to offset these expenses, impacting their competitiveness in the market.
Explore more articles in the Headlines category
