Ended De Minimis Exemption Raised Import Costs for Sellers
Retailers facing new customs fees and duties must now adjust their pricing models for U.S. consumer orders.
Updated on Oct. 7, 2026 in International Trade
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Following the termination of the de minimis trade exemption on May 2, 2025, retailers saw a significant increase in operational expenses. The policy change removed the $800 duty-free threshold, forcing companies to pay tariffs and processing fees on all incoming shipments.
Why it matters
The government eliminated the exemption to prevent the use of small, untracked packages for smuggling illegal drugs into the U.S. This shift has forced major importers to pivot from low-cost distribution models toward localized inventory and formal customs compliance.
CBP collected over $1 billion in duties from May to December 2025 after ending the $800 exemption. Retailers like Shein reported delivery costs of $17.90 per order for the year ending March 31, 2026, contributing to a 14% year-over-year revenue decline in the U.S. market during Q1 2026.
The players
President Donald Trump
The current President of the United States who signed the executive order terminating the de minimis trade exemption.
Shein
A global online retailer specializing in low-cost fashion that relies on high-volume direct-to-consumer shipping.
Temu
A large e-commerce marketplace platform that utilizes aggressive pricing and international shipping logistics.
The details
Retailers are now required to file formal customs paperwork for all U.S.-bound orders, moving away from previous direct-to-consumer parcel shipping. Beyond standard duties, companies must account for customs processing fees averaging $23.19 per package. To mitigate these overheads, many firms are shifting inventory into destination markets rather than fulfilling orders from abroad.
Timeline
May 2, 2025: De minimis exemption ended for China and Hong Kong.
July 2025: Executive order removed the exemption for all other countries.
August 29, 2025: Six-month period of a minimum $80 flat duty began.
March 31, 2026: Shein concluded its fiscal year.
Q1 2026: Shein experienced a 14% revenue decline in the United States.
Market Landscape
The end of the de minimis trade exemption marks a structural shift in international trade policy that prioritizes security over low-cost logistics. This decision marks a departure from decades of eased regulatory requirements for low-value consumer imports.
Operators relying on low-cost international fulfillment should audit their supply chain for customs compliance and adjust pricing to cover the new mandatory duties. Companies must now factor in fixed processing fees, which effectively erase the margin advantages once provided by small-parcel shipping.
The takeaway
The elimination of the de minimis threshold necessitates a permanent shift in how e-commerce firms price their international goods. Managers should immediately track total landed costs per unit to determine if their current shipping models remain viable under the new $80 minimum duty structure.
Further reading
For more on the changing regulatory environment, see our coverage of International Trade.
Source note: This article includes information reported by Quartz.
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