U.S. Ends Duty-Free Import Exemption for Low-Value Shipments

Starting August 29, 2025, the United States will eliminate the 'de minimis' exemption, which previously allowed duty-free entry for international shipments valued at $800 or less. This policy change, enacted earlier than scheduled under President Donald Trump, aims to reduce dependence on foreign goods and address concerns over tariff evasion and contraband imports.

Under the new regulations, all qualifying imports will be subject to tariffs ranging from 10% to 50%, or a flat fee between $80 and $200 per package for the next six months. This shift is expected to significantly impact small businesses and online shoppers who have relied on the exemption to import low-cost goods.

In response to the policy change, postal services in over a dozen countries, including Japan, the United Kingdom, and France, have announced temporary suspensions of U.S.-bound parcel shipments due to uncertainties over processing and payment requirements.

Small business owners express concern over the potential financial strain. Kristin Trainor, owner of Diesel and Lulu's boutique in Avon, Connecticut, sources over 70% of her inventory from European fashion houses. She anticipates that the added customs and duty charges will eliminate the affordability of her products, potentially leading to the closure of her store.

Similarly, Ken Huening, founder of CoverSeal in Los Gatos, California, manufactures protective covers in Mexico and China. He foresees the need to raise prices or end free shipping due to the new tariffs, noting that establishing a U.S. supply chain is not feasible in the short term.

The 'de minimis' exemption, established in 1938, was intended to save the federal government the time and expense of collecting duties on low-value imports. However, the volume of such shipments has surged in recent years, with 1.36 billion packages valued at $64.6 billion entering the U.S. last year, prompting the administration to reassess the policy.