US Suspends USD 800 De Minimis Customs Exemption in 2025

The Trump administration has published new rules related to the longstanding de minimis customs exemption, which allows goods valued at USD 800 or less to enter the US without duties. Initially planned by Congress to take effect in 2027, the exemption will be fully suspended for all countries, effective August 29, 2025, under the recently signed executive order.

Impact on Goods Importation

The issue of the de minimis exemption has already been discussed by Congress, which planned to end the exemption rule for all countries in July 2027. However, under the pretext of the opioid crisis, mounting trade deficits, and misuse of the loophole for tariff evasion, US President Donald Trump signed an executive order directing the suspension of the de minimis customs exemption. As stated in the executive order, traffickers exploited the low-value exemption to ship narcotics like fentanyl into the US.

Previously, in May 2025, the US administration issued a similar executive order targeting the importation of low-valued goods from China and Hong Kong. Now, the same rules will apply to all countries worldwide. Under the de minimis exemption, goods valued at USD 800 or less entered the US market without any tariffs or duties being imposed. The primary beneficiaries of this exemption were US consumers who would purchase affordable clothes and household items from e-commerce companies like Shein and Temu.

The shift in policy means significant changes not only for consumers, but also for importers. First, all packages previously exempt will now face complete duties. Secondly, shipments carried by carriers such as FedEx, UPS, or DHL will be subject to standard customs entry procedures and will incur all applicable tariffs, taxes, and fees.

Additionally, the executive order also includes the introduction of a fixed, specific duty on each package of goods imported for consumption, calculated according to the country of origin’s effective tariff rate under the International Emergency Economic Powers Act (IEEPA). 

Therefore, if the effective rate for the country is below 16%, each item in the shipment will incur a duty of USD 80. Goods imported from countries with a rate of 16% to 25% will be taxed at USD 160 per item. For those with an effective rate above 25%, the duty rises to USD 200 per item. The fixed-duty approach will be an option for carriers to use only during the first six months following the effective date of the order. Afterwards, all goods arriving in the US through the international postal network must be assessed using the ad valorem duty method.

Conclusion

The adverse effects of the executive order and decision to suspend the de minimis exemption now, rather than in mid-2027, should primarily be noticeable in the e-commerce sector, ranging from increased prices for consumers to additional administrative tasks and financial burdens for businesses selling low-value goods to their customers. E-commerce businesses that rely on low-value goods imports should act fast to determine how this decision affects their business model, operations, and pricing.

Source: The White House