By NBC News
Popularized by Chinese e-tailers Shein and Temu, use of the de minimis exemption has ballooned from 134 million shipments in 2015 to over 1.36 billion in 2024.
The de minimis exemption, an obscure trade law provision that has simultaneously fueled and eroded businesses across the globe, officially came to an end on Friday (Aug. 29) following an executive order by President Donald Trump.
For nearly a decade, shipments valued under $800 were allowed to enter the country virtually duty free and with less oversight. Now, those shipments from the likes of Tapestry, Lululemon and just about any other retailer with an online presence will be tariffed and processed in the same way that larger packages are handled.
In May, Trump ended the exemption for goods coming from China and Hong Kong, and on July 30 he expanded the rollback to all countries, calling it a “catastrophic loophole” that’s been used to evade tariffs and get “unsafe or below-market” products into the U.S.
The de minimis exemption had previously been slated to end in July 2027 as part of sweeping legislation passed by Congress, but Trump’s executive order eliminated the provision much sooner, giving businesses, customs officials and postal services less time to prepare.
“The ending of that under-$800-per-person-per-day rule, from a global perspective, is about to probably cause a bit of pandemonium,” said Lynlee Brown, a partner in the global trade division at accounting firm EY. “There’s a financial implication, there’s an operational implication, and then there’s pure compliance, right? Like, these have all been informal entries. No one’s really looked at them.”
Already, the sudden change has snarled supply chains from France to Singapore and led post offices across the world to temporarily suspend shipments to the U.S. so they can ensure their systems are updated and able to comply with the new regulations.
It’s forced businesses both large and small to rethink not just their supply chains, but their overall business models, because of the impact the change could have on their bottom lines — setting off a panic in board rooms across the country, logistics experts said.
“Obviously it’s a big change for operating models for companies, not just the Sheins and the Temus, but for companies that have historically had e-com and brick-and-mortar stores,” Brown said.
The change also means consumers, already are under pressure from persistent inflation and high interest rates, could now see even higher prices on a wide range of goods, from Colombian bathing suits to specialty ramen subscription boxes shipped straight from Japan.
The end of de minimis could cost U.S. consumers at least $10.9 billion, or $136 per family, according to a 2025 paper by Pablo Fajgelbaum and Amit Khandelwal for the National Bureau of Economic Research. The research found low-income and minority consumers would feeling the biggest impact as they rely more on the cheaper, imported purchases.
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