Since August 29, 2025, every package entering the US faces customs duties regardless of value. The $800 duty-free exemption is gone.
On August 29, 2025, the de minimis provision under Section 321 of the Tariff Act was formally eliminated for commercial shipments. Previously, any package valued at $800 or less could enter the US without formal customs entry or duty payment. This provision was processing an estimated 4 million packages per day, with the vast majority originating from China. The elimination means all commercial imports now require formal or informal customs entry, HS code classification, and payment of applicable duties and tariffs.
The change hit direct-to-consumer e-commerce platforms hardest. Businesses built on the de minimis model, shipping individual low-value packages directly from overseas factories to US consumers, face a fundamental restructuring of their cost model. Small sellers who relied on the exemption for sample orders, small restocking shipments, and customer returns are also affected. The additional duty costs typically add 10-35% to the landed cost of each package depending on the product type and country of origin.
The most effective adaptation is shifting from individual direct-ship packages to bulk importing through a warehouse. By consolidating shipments, you reduce per-unit brokerage costs and can take advantage of duty drawback programs. MarginHub helps you model the cost difference between your current shipping model and a warehouse-based fulfillment approach, accounting for all applicable tariffs and the Section 122 surcharge.
The de minimis threshold was an $800 exemption that allowed goods valued under $800 to enter the US duty-free without formal customs entry. It was originally set at $200 and raised to $800 in 2016 to facilitate e-commerce. On August 29, 2025, this exemption was eliminated entirely.
The threshold was exploited by high-volume shippers, particularly from China, to avoid billions in customs duties. An estimated 4 million packages per day entered under de minimis, with platforms like Temu and Shein using it to undercut domestic retailers. Congress eliminated it to close this loophole and level the playing field.
Consumers now pay import duties on every international purchase regardless of value. A $30 item from China that previously arrived duty-free now incurs tariffs of 30-45% depending on the product category. This has increased the price of low-cost imported goods and reduced the price advantage of direct-from-China e-commerce platforms.
No general value-based exemption exists anymore. However, goods from USMCA countries that meet rules of origin requirements, certain personal gifts under $100, and a narrow list of duty-free products under existing trade agreements may still enter without additional duties. The key change is that value alone no longer determines duty-free status.
See how the de minimis elimination affects your product costs and find the most cost-effective fulfillment strategy.
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