On August 29, 2025, a seismic shift hit the world of U.S. online shopping and international trade. The long-standing “de minimis” tariff exemption, which for years allowed Americans to receive small overseas packages worth $800 or less without paying import duties, officially ended—nearly two years ahead of schedule. Signed into effect by President Donald Trump through an executive order in July, the move marks a dramatic turn in U.S. trade policy and is already sending shockwaves through businesses and postal systems worldwide, according to reports from the Associated Press and Nexstar Media.
For decades, the de minimis exemption—first established in 1938 under Section 321 of the Tariff Act—let low-value goods slip into the United States free of import taxes. Originally, the threshold was a mere $1, a figure meant to spare customs agents the hassle of collecting pennies on trinkets. Over the years, Congress steadily raised the cutoff: to $5 in 1990, $200 in 1993, and, in 2015, a whopping $800. That last jump proved transformative. According to U.S. Customs and Border Protection, the number of de minimis shipments skyrocketed from 134 million in 2015 to an astonishing 1.36 billion in 2024, with a combined value of $64.6 billion. The White House revealed that by late July 2025, over 4 million of these packages were processed every single day.
But the party is over. As of Friday, all international shipments—regardless of their value—must now clear customs and are subject to tariffs ranging from 10% to 50%, or, for the next six months, a flat duty of $80 to $200 per package for mail network orders. The rule change comes on the heels of a previous suspension of the exemption for packages from China and Hong Kong back in May, which had already shaken up a market dominated by Chinese e-commerce giants like Temu and Shein. According to logistics firm Flexport, about 60% of de minimis shipments in 2024 originated from China and Hong Kong, with the rest coming from Canada, Mexico, the European Union, India, and Vietnam.
The rationale for this abrupt change is twofold. First, the Trump administration—and a bipartisan chorus in Congress—argue that the exemption became a loophole, letting foreign retailers undercut U.S. businesses and workers. The National Council of Textile Organizations, for example, called the exemption a “backdoor pipeline for cheap, subsidized, and often illegal, toxic and unethical imports.” Second, the White House has pointed to national security concerns. In a statement cited by Nexstar Media, the administration argued the rule “has been abused, with shippers sending illicit fentanyl and other synthetic opioids, precursors, and paraphernalia into the United States in reliance on the lower security measures applied to de minimis shipments, killing Americans.”
But the fallout extends far beyond big-box retailers and drug enforcement. Small businesses across America, especially those that import specialty goods, are bracing for a tough road ahead. Kristin Trainor, who owns Diesel and Lulu’s, a boutique in Avon, Connecticut, sources over 70% of her women’s clothing and accessories from small fashion houses in France, Italy, and Spain. For years, her business model relied on placing small, frequent orders that fell under the $800 threshold. “Our business model is to provide casual chic and unique clothes at affordable prices,” Trainor explained to the Associated Press. “The added customs and duty charges that will go into effect on Aug. 29 will eliminate that affordability.” She estimates the wholesale price of a simple linen sundress will jump from $30 to $43 next month—a hike she fears her customers won’t accept. Though she’s searching for U.S.-based vendors, her bestsellers, like Italian linen apparel, just aren’t made domestically. “At this point, I am leaning more and more towards closing the boutique, sadly,” she admitted.
It’s not just fashion feeling the squeeze. Ken Huening, founder of CoverSeal in Los Gatos, California, makes protective covers for cars, grills, and patio furniture. His products are manufactured in Mexico and China, but the new rules mean shipments from Mexico—despite the U.S.-Mexico-Canada Agreement (USMCA)—will now be taxed. “We are often asked why we don’t just establish a U.S. supply chain,” Huening said. “It is not possible in the short term. By the time the infrastructure is established, many companies and small businesses will be out of business.”
Shannen Knight, owner of A Sight For Sport Eyes in West Linn, Oregon, imports specialized sports goggles from the U.K., the Netherlands, and Italy. These products, such as rugby goggles approved by the International Rugby Board after two years of testing, simply aren’t available from U.S. manufacturers. Knight estimates she’ll need to raise prices by 50% to cover the new tariffs. “There are products that it just makes sense to be made internationally, where there is the stronger demand for them, but there still is some demand for in the U.S.,” Knight told the AP.
The international response has been swift—and chaotic. Postal services from more than a dozen countries, including Japan, Switzerland, Australia, Austria, Belgium, Finland, France, Germany, India, Italy, Norway, Spain, Sweden, Denmark, Thailand, the U.K., and New Zealand, have temporarily suspended sending some or most packages to the U.S. due to confusion over the new processing and payment requirements. DHL, Europe’s largest shipping courier, has stopped certain business shipments to the U.S., citing unresolved questions about how customs duties will be collected and what data is needed for U.S. Customs and Border Protection. India, for its part, announced it would suspend all shipments to the U.S. except for letters and gifts valued at less than $100.
Despite the sweeping changes, there are a few exceptions. Americans returning from abroad can still bring back up to $200 worth of personal items duty-free, and gifts worth $100 or less sent to individuals remain exempt. But for the millions of consumers and businesses who’ve grown accustomed to the frictionless world of global e-commerce, the new reality is a stark one.
Proponents of the change see it as a necessary step to level the playing field for American businesses and to close loopholes exploited by both foreign competitors and criminals. Critics, however, warn that the sudden end to the de minimis rule could force small businesses to close, drive up prices for consumers, and disrupt international commerce in unpredictable ways. As the dust settles, one thing is clear: the era of the duty-free online bargain is, for now, over.
