The United States has ended a long-standing tariff exemption that allowed low-value imports to enter duty-free.
From Friday, parcels worth $800 or less will face new customs duties and inspections. Millions of shipments every day will be affected.
In 2023, around 1.4 billion packages valued at over $64bn entered the US under this exemption, according to customs data.
Experts warn the move will push prices higher, reduce consumer choice, and challenge small businesses.
Katherine Theobalds, founder of Buenos Aires shoe brand Zou Xou, said: “It might be the end for us.”
How de minimis shaped trade
The de minimis exemption, created in 1938, aimed to avoid the expense of collecting minor tariffs.
Over time, the threshold grew, supporting e-commerce growth and enabling retailers to ship directly to American buyers.
Companies such as Shein and Temu built their business models on this advantage, sending low-cost goods directly from factories.
But many other global and domestic firms also relied on the exemption for supply chains and sales models.
Tapestry, owner of Coach, expects a $160m profit hit this year, with one-third linked to the rule’s end.
More than 90% of US-bound cargo previously used the de minimis exemption.
Both Donald Trump and Joe Biden criticised the rule, saying it harmed US businesses and allowed smuggling.
Trump adviser Peter Navarro said ending it will reduce fentanyl shipments and add $10bn annually to federal revenue.
Trump accelerated the repeal via executive order, cancelling its planned 2027 expiry.
Shippers now must either pay origin-based tariffs or a temporary flat fee of $80–$200 per package, available for six months.
China and Hong Kong lost access in May, prompting Temu to halt direct US sales. Personal gifts and letters under $100 remain exempt.
Fewer options, slower delivery
US shoppers may face reduced product variety and longer delivery times as businesses adjust.
Small exporters now must document the origin of all materials, said logistics expert Tam Nguyen. That slows shipping and complicates operations.
Some niche goods may disappear as exporters avoid costly compliance.
Portland vinyl collector Christopher Lundell had a $5 UK record order cancelled. He called the move “political theatre” but recognised the need to protect US producers.
Postal services in Europe and Asia paused shipments to the US due to uncertainty over the new rules.
Rising costs for buyers
Tariffs now depend on the origin country.
Goods from the UK and Australia face 10%, while products from Brazil and India can reach 50%.
Flat fees range from $80 for low-tariff nations to $200 for higher-tariff ones.
Officials insist the policy will make Americans “safer” and “more prosperous.”
Some US companies welcomed the change. Gap Inc. said the exemption had allowed some competitors to avoid paying fair duties.
Trade expert Deborah Elms warned that small firms will face costly audits, and many may turn to expensive express couriers, raising prices.
UK retailer Wool Warehouse paused exports to the US, warning prices could rise up to 50%. The company will list tariff charges online for transparency.
At Zou Xou, Theobalds said she must rethink her approach. “Even if prices remain stable, complex duties may discourage buyers,” she said.
Could China gain an advantage?
US chains like Walmart and Target may benefit if imported goods become too costly.
Chinese firms, however, may adapt faster. Shein and Temu already operate US distribution centres to mitigate tariff effects.
Nguyen said Chinese exporters are months ahead in mastering customs paperwork compared with firms elsewhere.
For smaller businesses, the repeal closes an easy entry point. “That low-cost path into the US market is gone,” Nguyen said.
