The United States has moved to end its long-standing de minimis tariff exemption for small international packages, eliminating duty-free entry for imports valued at $800 or less. The change, effective Friday, August 29, follows an executive order issued last month and comes nearly two years earlier than the original Congressional timeline. It is expected to affect millions of daily e-commerce deliveries into the US.
What was the De Minimis rule?
The de minimis exemption allowed low-value imports to enter the US without paying customs duties, easing cross-border e-commerce. Introduced in 1938 at just $1, the threshold was gradually raised—$5 in 1990, $200 in 1993, and $800 in 2015. In 2023, 1.36 billion packages worth $64 billion entered duty-free under this system, compared with 134 million in 2015, as reported by Economic Times. Both now-president Trump and his predecessor Biden had raised concerns about misuse of the rule, including for smuggling illicit goods such as fentanyl, and its impact on US businesses.Also read: Donald Trump scraps duty-free parcel exemption rule; cites tariff evasion, drug smuggling
What changes now?
Starting Friday, all imports will face US customs duties based on their country of origin and product category. Tariff rates range between 10 per cent and 50 per cent- for example, around 10 per cent for shipments from the UK and Australia, and as high as 50 per cent for goods from Brazil and India. Carriers must now file proper documentation for each shipment. Where paperwork is incomplete, they can opt to pay a flat duty of $80–$200 per package for six months as postal systems adapt. Personal gifts worth under $100 and traveller items up to $200 will still enter duty-free.
Who is affected?
China and Hong Kong dominate the small-package trade, accounting for about 60 per cent of US-bound shipments in 2024. Other major suppliers include Canada, Mexico, the EU, India and Vietnam. The new tariffs are likely to raise prices for online shoppers and reshape global e-commerce flows. Companies such as Shein and Temu, which already have large US distribution networks, may benefit as consumers seek cheaper alternatives despite added duties.
