The US has officially closed the door on the de minimis exception, sometimes known as Section 321. For decades it was a strategic lever used by fast-growing ecommerce brands to import low-cost goods into the US, duty-free. But starting August 29, 2025, that exception disappears—for every country.
This change comes as part of a broader shift in US trade and economic policy put in place by the current administration.
What Was the De Minimis Rule?
Under the de minimis exemption, low-value goods—under $800 per shipment— could be imported directly to US consumers without paying tariffs or undergoing the typical customs checks required of bulk importers. This enabled ultra-fast, ultra-cheap delivery of goods via platforms like Temu, Shein, and other global ecommerce giants. It also benefited smaller DTC brands that manufactured overseas, helping them preserve healthy margins by avoiding duties on individual orders shipped directly to customers.
The rule originally served to reduce the burden on US Customs by filtering out low-value, low-risk shipments. But in recent years, the rise of direct-to-consumer (DTC) global ecommerce has led more scrutiny to businesses that structure their supply chains to exploit the loophole at scale.
Why the Change?
As a bit of context, the de minimis policy was originally designed to streamline customs processing for low-value goods and reduce administrative burden. However, the rapid growth of global ecommerce—especially direct-to-consumer platforms—has dramatically increased the volume of small packages entering the US each day. In 2024 alone, more than 1 billion packages arrived under the de minimis threshold, reflecting a major shift in how consumers shop and how goods move across borders.
As international sellers increasingly used the exemption to scale operations and reach US customers directly, policymakers began reassessing whether the current system balanced economic efficiency with regulatory oversight, product safety, and competition. The latest policy update (Trump eliminated Section 321 from China earlier this year, and the latest executive order deems the de minimis exception gone for all countries of origin) reflects that reassessment—marking a significant shift in how cross-border ecommerce will be regulated moving forward.
Affected by 321 ending or rising tariffs?
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What This Means for Ecommerce Brands
For global ecommerce brands—and especially for marketplaces like Shein and Temu—this is a game-changer. Their business models often rely on shipping millions of low-cost items directly to consumers, avoiding warehousing, tariffs, and regulation. That cost advantage just vanished overnight.
Here are some key implications:
- Increased Costs: Goods under $800 now face import duties, which could significantly erode margins or be passed on to consumers via higher prices.
- Supply Chain Disruption: Many brands will need to rethink their fulfillment strategies. Domestic warehousing or bonded warehouses in the US may become necessary to manage compliance and reduce per-package shipping costs.
- Compliance Burden: More shipments will now be subject to inspection, adding complexity to customs declarations, product labeling, and safety requirements.
- Level Playing Field for US Brands: Domestic manufacturers and retailers may gain some relief as imported goods become less price competitive.
What Should Brands Do Now?
Brands who manufacture abroad will need to adapt quickly or face significant cost pressures. While this change shouldn’t come as a surprise to any global business, the deadline is approaching much faster than most anticipated.
- Audit Your Supply Chain: If you rely on drop-shipping from overseas, assess how this impacts your landed cost per unit.
- Explore Domestic Fulfillment: Warehousing in the US or near-shore options like Mexico may offer cost and compliance advantages.
- Revisit Pricing Strategy: Factor in duties and potential delays to avoid margin erosion.
- Prepare for More Scrutiny: Work with customs brokers and logistics partners to ensure full compliance with US import laws.
Bottom Line
The closure of the de minimis loophole signals a new era in global trade—and ecommerce brands must recalibrate. While this move may raise costs and complexity in the short term, it also presents an opportunity for quality-focused, transparent brands to build trust with US consumers and compete on more than just price.
The message is clear: the days of duty-free, direct-from-factory imports are over. Time will tell exactly how the ecommerce industry will evolve in response.
Tags: International
