United States Ended De Minimis Trade Exemption
New tariffs and customs processing fees resulted in higher costs for international retail shipments.
Updated on Oct. 7, 2026 in International Trade
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Beginning May 2, 2025, the U.S. eliminated the de minimis trade exemption that previously allowed packages worth up to $800 to enter the country duty-free. The policy shift, which expanded to all countries by July 2025, aimed to stop the use of deceptive packaging to hide illicit drugs in low-cost shipments.
Why it matters
The federal government implemented these trade changes to enhance oversight of small-parcel imports, which had been previously exempt from traditional scrutiny. By requiring full customs documentation, officials sought to better track the flow of goods and mitigate security risks associated with rapid, cheap imports.
Customs and Border Protection collected over $1 billion in duties from May to December 2025. Each package now faces a flat duty of at least $80 and approximately $23.19 in additional processing fees.
The players
Donald Trump
As the current President of the United States, he signed the executive order in July 2025 to end the de minimis exemption for all countries.
Shein
This global online retailer experienced significant revenue declines and increased operational costs following the policy shift.
Temu
This e-commerce platform was among the major retailers that raised prices on U.S. consumer orders in response to new tariff requirements.
Customs and Border Protection
This agency is responsible for collecting duties and enforcing trade regulations on all international shipments entering the United States.
The details
Retailers like Shein and Temu responded to the new compliance requirements by moving inventory handling into destination markets and filing full customs paperwork. Consequently, Shein reported that its delivery costs per order rose to $17.90 in the fiscal year ending March 31, 2026, while its U.S. revenue fell 14% in the first quarter of 2026.
Timeline
May 2, 2025: The de minimis exemption ended for imports from China and Hong Kong.
July 2025: President Donald Trump signed an executive order ending the exemption for all other countries.
August 29, 2025: A mandatory flat duty of at least $80 per package took effect.
March 31, 2026: Shein concluded its fiscal year following a rise in delivery costs.
Q1 2026: Shein reported a 14% decline in U.S. revenue compared to the previous year.
Market Landscape
The ending of the de minimis exemption marks a return to traditional enforcement mechanisms under the broader framework of the Tariff Act of 1930. This policy shift forces e-commerce giants to abandon low-cost logistics models in favor of established supply chain compliance protocols.
Consumers are likely to see sustained price increases as retailers pass on the costs of customs processing and flat duties to the end buyer. Shoppers should expect higher shipping fees and potentially longer delivery windows as companies reorganize their U.S. distribution networks.
The takeaway
The end of the de minimis exemption fundamentally alters the economics of cross-border shopping for the average American household. Readers should prepare for a transition away from ultra-cheap, untaxed imports as retailers adjust their business models to meet new federal customs requirements.
Further reading
For more on evolving global commerce regulations, read the latest coverage in International Trade.
Source note: This article includes information reported by Quartz.
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