The de minimis shake-up: the end of cheap, duty-free parcels?
A little-known customs rule helped build the cross-border shopping boom. This week the US tried to switch it off for China, then paused. Either way, the economics of online retail are shifting.
By the Xuru Technologies team · 9 February 2025
Key takeaways
- The US de minimis rule let shipments valued at US$800 or less enter without duties.
- The China tariff order that took effect on 4 February 2025 removed that exemption for Chinese goods; on 7 February it was paused until customs systems were ready.
- Platforms such as Temu and Shein relied heavily on direct, low-value parcels.
- Domestic and regional sellers may regain price competitiveness, but shoppers will expect clear delivery and returns information.
Why could a dress ship from China to a US doorstep for a few dollars, duty-free? Largely because of de minimis. Its future now looks uncertain.
What happened
As NPR explained, the executive order imposing an extra 10% tariff on Chinese imports also ended de minimis treatment for those goods. Customs authorities warned of disruption to the very large volume of small parcels, and within days the White House paused the change until systems were in place to process and collect duties. Holland & Knight noted the move targeted what critics call a big loophole.
What it means for businesses
- Cross-border sellers should prepare for duties and slower customs clearance on low-value parcels into the US.
- Local and regional brands may compete better on price and delivery speed — if their websites make that clear.
- Transparency sells. Shoppers want to know the full price, including any duties, before checkout.
- Other markets are watching. The EU and UK have also debated how low-value imports are taxed.
What to do now
| If you… | Do this |
|---|---|
| Ship internationally | Show estimated duties and delivery times by country at checkout |
| Sell locally | Highlight fast local delivery and easy returns on product pages |
| Source from overseas | Recalculate landed cost for your best-sellers under different scenarios |
| Run a D2C brand | Review shipping and returns pages so they answer questions before customers ask |
See our guide to D2C product pages and checkout that sell.
Frequently asked questions
What does de minimis mean?
It is a threshold below which imported goods can enter a country without paying duties or going through full customs procedures. In the US it was US$800 per person per day.
Does this affect sellers outside China?
The February 2025 change targeted goods from China, but policy was moving towards tighter rules on low-value imports more broadly.
How should I show duties to customers?
Use a checkout that can calculate or clearly estimate duties and taxes by destination, and explain who pays them before the order is placed.
A checkout that shows the full price, upfront.
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