U.S. Ends Tariff Exemption for Low Value Shipments Changing Trade Rules

The United States has officially ended a long-standing import tariff exemption for packages valued at $800 or less, a change that took effect today. This exemption, known as the de minimis rule, had allowed millions of low-value packages to enter the country duty-free, supporting the growth of cross-border e-commerce and small-scale international shipping. With this change, all shipments regardless of value are now subject to tariffs and additional customs scrutiny, a move with significant implications for businesses and consumers alike.

The de minimis exemption has been a pillar of U.S. trade policy for decades. It was initially designed in 1938 to avoid the cost and complexity of collecting tariffs on small shipments where the value did not justify the administrative expense. For many years, the threshold for exemption was set at $200. In 2016, under the Trade Facilitation and Trade Enforcement Act signed by then-President Barack Obama, this threshold was dramatically increased to $800, which was among the highest globally. This increase was intended to ease the flow of goods, facilitate e-commerce growth, and simplify customs procedures for low-value shipments. After the increase, the number of packages entering the U.S. under this exemption rose sharply from about 140 million in 2014 to more than 1.3 billion by 2024, accounting for over $64 billion in imports annually exempt from duties. 

However, this surge also raised concerns for policymakers. The de minimis rule became criticized as a loophole that allowed the importation of goods which would otherwise face tariffs, regulatory inspections, or bans. It was also seen as a conduit for illicit shipments, particularly drugs like fentanyl, to evade customs enforcement. The Trump administration argued the exemption distorted fair trade and harmed American businesses by giving foreign e-commerce platforms an unfair advantage. In early 2025, President Trump announced the intention to end this exemption entirely, signaling a shift toward more stringent customs enforcement and tariff collection on all imports, regardless of value. 

Starting today, U.S. Customs and Border Protection (CBP) imposed tariffs on all low-value imports under $800, closing the exemption that previously allowed such shipments to skip tariffs. The new rules specify two ways tariffs will be calculated during an initial six-month transition period: either a flat fee ranging from $80 to $200 per package depending on the country of origin’s tariff rate, or an ad valorem tariff based on the shipment’s value and the reciprocal tariff rate established for the country involved. After six months, all items will incur ad valorem tariffs typically ranging between 10% and 40%, depending on the product category and origin. 

The impact of ending the de minimis exemption is multifaceted. Consumers can expect higher prices on imported goods, especially those purchased through overseas e-commerce platforms. Retailers and small businesses that relied on duty-free shipping to meet customer demands will face increased costs and supply chain challenges. This is already causing disruptions globally, with more than 30 countries, including Canada, Australia, Germany, Japan, and Mexico, pausing or restricting shipments to the United States in anticipation of these changes. Logistics providers such as DHL have also temporarily stopped standard shipments to the U.S. to better assess compliance and the customs process under the new rules. 

From a business perspective, this rule change demands significant operational adjustments. U.S. importers now must ensure duty payments are processed before shipping, and carriers must provide proof of duties paid. For example, Canadian exporters shipping small packages to the U.S. must now collect duties at origin and provide a declaration ID as confirmation, changing the economics of cross-border trade for many small merchants. The increased tariff burdens may push some sellers to raise prices, reduce shipments, or reconsider their business models. 

The end of the de minimis exemption marks a major turning point in U.S. import policy. While it closes what was seen as a trade loophole, it also introduces complexity and added costs that will ripple through the global supply chain. Consumers should expect to pay more for small-value imported goods in the near term, and businesses will need to navigate a new landscape of tariff compliance and customs regulations. What has long been a convenient pathway for billions of smaller shipments has now been narrowed, signaling a more regulated and tariff-inclusive approach to international trade in the United States.