Low-value imports into the United States lost their duty-free status on Friday, following an executive order by President Donald Trump. The order removed a long-standing customs exemption for international shipments valued at $800 or less, effective as of 12:01 a.m. Eastern Daylight Time. This change comes nearly two years ahead of the deadline set in a tax and spending bill passed by Congress.
As a result, national postal services from more than 30 countries—including Australia, New Zealand, India, Japan, Mexico, Thailand, and most European nations—have temporarily suspended some or most U.S.-bound package deliveries. Postal officials say they did not have enough time or information to begin collecting duties on small parcels.
Shipments that previously entered the U.S. without customs clearance will now require vetting and be subject to tariffs based on their country of origin. These rates can range from 10% to 50%. For the next six months, mail carriers may apply a flat duty between $80 and $200 for packages sent through the global postal network. After this period, both mailed parcels and those handled by private couriers will face value-based tariff rates.
The “de minimis” exemption was first introduced in 1938 for imports valued at $1 or less as a way to save government resources on low-value goods. Over time, lawmakers raised the threshold—to $5 in 1990, $200 in 1993, and finally $800 in 2015 according to Congressional Research Service data. Since then, there has been significant growth in shipments using this exemption; last year alone saw 1.36 billion packages worth $64.6 billion enter the U.S., compared with just 134 million such packages in 2015.
About 60% of these shipments originated from China and Hong Kong based on an analysis by logistics firm Flexport using U.S. government data; other sources included Canada, Mexico, the European Union, India, and Vietnam.
Supporters of limiting the exemption argue it allowed platforms like Temu and Shein to send large volumes of inexpensive goods into the country while avoiding tariffs. The National Council of Textile Organizations stated that ending this practice would help close what it called a “backdoor pipeline for cheap, subsidized, and often illegal, toxic and unethical imports.” However, some small American businesses that depend on imported products also benefited from the exemption.
Kristin Trainor owns Diesel and Lulu’s boutique in Avon, Connecticut. She said over 70% of her store’s inventory comes from small fashion houses in France, Italy and Spain—orders typically falling under the previous $800 threshold.
“Our business model is to provide casual chic and unique clothes at affordable prices,” she said. “The added customs and duty charges that will go into effect on Aug. 29 will eliminate that affordability.”
Trainor explained she is seeking domestic suppliers but finds it difficult due to her bestselling categories being sourced abroad—such as Italian linen apparel—and expects wholesale costs for items like sundresses to rise significantly next month.
“I have not made any official announcements to my customers just yet,” Trainor said. “At this point I am leaning more and more towards closing the boutique sadly.”
Ken Huening runs CoverSeal out of Los Gatos, California—a company selling protective covers manufactured in Mexico and China since its founding in 2020. While most Mexican-made goods are exempt from country-specific tariffs under a trade agreement established in 2020 (https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement), Huening noted that removal of de minimis applies regardless of origin.
“We are often asked why we don’t just establish a U.S. supply chain,” he said. “It is not possible in the short term. By the time the infrastructure is established many companies and small businesses will be out of business.”
Shannen Knight owns A Sight For Sport Eyes in West Linn, Oregon—an online retailer importing specialty sports goggles mainly from Europe that previously qualified under de minimis rules. Knight estimates she must raise retail prices by up to half for certain products due to new import taxes.
“It took the International Rugby Board two years of testing to approve the Italian-made goggles,” Knight said about one specialty item now facing higher costs.
