The change affects the so-called de minimis rule — a provision dating back to 1938 that allowed imports under a certain value threshold to enter the U.S. without paying duties. Originally intended for packages valued at no more than $5 (adjusted to $800 in 2016), the rule had become a backbone for international e-commerce platforms, especially those shipping inexpensive goods from China.
President Donald Trump, whose administration is reviving a hardline trade stance, has described the exemption as “a big scam” and argued that it disadvantages American small businesses. The end of the provision adds to the administration’s sweeping tariff agenda, which already includes new duties of up to 145% on a range of Chinese goods — a move met with retaliation from Beijing.
What This Means for Consumers and Retailers
For everyday shoppers, the change could mean higher prices, particularly from Chinese platforms like Temu and Shein, which have thrived under the duty exemption. Temu has already started listing additional “import charges” on some products, while Shein has rolled tariffs into its prices to avoid surprises at checkout. Amazon, for now, has said it won’t itemize tariffs on product listings, though changes may occur depending on regulatory clarity.
Deliveries could also slow down. Low-value parcels now require customs declarations and duty collection, complicating a system that processed up to 4 million such packages daily — the majority from China. Major parcel carriers like FedEx and UPS say they are prepared to comply, but logistics experts warn that bottlenecks are likely, especially in the early stages of implementation.
Impact on Businesses and Supply Chains
Retailers who relied on the exemption are being forced to rethink their operations. For some, like Arizona-based swimwear brand HAPARI, the shift is significant. CEO John Curry had recently transitioned to a model that used the exemption to cut costs and speed up delivery. Now, he must weigh absorbing the new 145% tariff or restructuring his supply chain.
Logistics companies are also adjusting. Izzy Rosenzweig, founder of Portless — a platform that facilitates low-cost global shipping — said that while China’s manufacturing advantages remain strong, thin-margin retailers may need to pivot to U.S.-based warehousing to remain viable.
“There will be price increases,” Rosenzweig said, “but not all businesses can afford to pass them on. Some will localize, others may exit entirely.”
A Boost for U.S. Manufacturers
While e-commerce players brace for disruption, some domestic manufacturers welcome the move. The Flag Manufacturers Association of America and companies like Embroidery Solutions Manufacturing, which produces American flag components, have seen sales fall due to competition from cheaper imports.
“We need duties to level the playing field,” said Embroidery Solutions CEO Larry Severini, who recently shuttered one of his factories due to declining sales.
The National Bike Dealers’ Association echoed these sentiments, citing an influx of knockoff products online that undercut reputable brands on price but compromise on safety and service.
Looking Ahead
The U.S. Customs and Border Protection says it is prepared to enforce the new rules and collect all applicable revenues starting May 2. However, the sheer volume of daily shipments raises questions about how smoothly the transition will go.
With 70% of the 216 million packages entering the U.S. in January and February coming from China, the logistical burden is considerable. Yet for the administration, the goal is clear: bolster domestic businesses, tighten trade rules, and recalibrate the e-commerce playing field.
While many businesses hope for a longer-term resolution between the U.S. and China, others see the current environment as a catalyst for reshaping global supply chains.