What the End of the “De Minimis” Exemption Means for Small Business Owners

Another day, another regulation update! Beginning August 29, 2025, the U.S. will officially eliminate the “de minimis” tariff exemption, which previously allowed shipments worth $800 or less to enter the country duty-free. For many small business owners, this change could significantly impact costs, logistics, and pricing strategies. These impacts are what we’ll be reviewing today. Let’s dive in…

What Was the De Minimis Exemption?

The de minimis rule is a customs provision that allowed low-value shipments to avoid duties and formal customs paperwork. In 2016, the threshold was raised from $200 to $800, making it one of the most generous in the world. This policy helped fuel the growth of e-commerce platforms and direct-to-consumer imports, with the number of shipments skyrocketing from about 140 million in 2015 to over 1 billion per year by 2023.

Why It’s Being Eliminated

The White House announced in Executive Order 14324 that the exemption will be suspended for all countries effective August 29, 2025. Officials argue the policy has been abused by e-commerce giants and bad actors to evade tariffs, import counterfeit goods, and even smuggle illicit substances.

What’s Changing?

1. Duties on all shipments under $800
   Every shipment, regardless of value, will now require formal customs entry, documentation, and payment of duties, taxes, and fees.
2. Flat or value-based charges for postal shipments
   For the first six months, goods shipped via postal services will face either a duty percentage based on country of origin or a flat fee of $80, $160, or $200 per item, depending on origin. After that, all shipments will revert to ad valorem (value-based) tariffs.
3. Shipping disruptions
   Postal operators in Europe, Asia, and North America are already pausing deliveries to the U.S., citing unclear rules and the need to overhaul customs systems quickly.

What Small Businesses Should Expect

• Higher costs
  Many small businesses that relied on affordable imports from platforms like Shein, Temu, or independent overseas suppliers will now face added tariffs of 10 percent to 50 percent, or flat fees up to $200 per shipment. This will raise landed costs and reduce pricing flexibility.
• More paperwork and compliance burdens
  Previously, shipments under $800 required little paperwork. Now, small businesses have to file formal customs entries, possibly obtain bonds, and maintain detailed documentation—even for small orders.
• Potential customer frustration
  Shipping delays and higher product costs may frustrate customers who’ve grown accustomed to cheap and fast cross-border e-commerce.

How to Prepare

• Audit your supply chain: Identify products that depended on the $800 threshold and calculate new landed costs.
• Adjust pricing and sourcing: Be transparent with customers about higher costs, or consider shifting to domestic suppliers.
• Consolidate shipments: Fewer, larger imports may be more cost-effective than frequent small orders.
• Stay informed: Customs and Border Protection guidance is still evolving, so be sure to monitor updates closely.

The elimination of the de minimis exemption marks one of the biggest shifts in U.S. trade rules in nearly a decade. For small business owners, the change means higher costs, new compliance requirements, and possible disruptions. While challenging, those who act now—by reassessing pricing, sourcing, and logistics—can adapt and continue to compete in a changing marketplace. And as we always say, stick with ARF Financial and the Financial Pantry to stay updated on every shifting policy.

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