Tariff exemptions for packages shipped to the U.S. worth $800 or less are set to end this week, following President Trump’s executive order to suspend the “de minimis” tax exemption rule. The de minimis tax exemption was created in 1938 under Section 321 of the Tariff Act of 1930 and allows low-value packages to enter the country duty-free. In 2024, over 92% of all cargo entering the U.S., including 1.3 billion packages worth over $64 billion, arrived through the de minimis exemption, according to U.S. Customs and Border Protection (CBP).
The suspension of de minimis exemptions has led to bipartisan support for restructuring or eliminating de minimis shipments, as some argue it gives international manufacturers an unfair advantage and makes it easier for drugs and unwanted goods to enter the country. Both the Biden and Trump administrations have expressed concern about the potentially negative impacts of de minimis shipments.
In April, Trump signed an executive order to end the de minimis exemption exclusively for China and Hong Kong to counter the ongoing health emergency posed by the illicit flow of synthetic opioids into the U.S. This increased the duty rates for goods that would have been covered by the de minimis protection to 30 percent of their value. Now, every country is set to lose the benefits of the exemption.
Postal services around the world are announcing plans to halt certain shipments to the U.S., with Europe’s largest shipping provider, DHL, stating it cannot ship business parcels to the U.S. until details surrounding the new duties are clarified. Germany, Denmark, Sweden, Italy, France and Austria will halt certain deliveries on Monday, while the U.K. will do the same by Tuesday. India’s postal officials have announced they will suspend most shipments to the U.S. starting Aug. 25.
The suspension of de minimis exemptions will likely impact the global economy significantly, particularly for fast fashion brands like Shein and Temu, which have already begun increasing prices on their products in response to Trump’s trade policies. American consumers may face the brunt of the impact from the elimination of de minimis worldwide, with research suggesting that eliminating the exemption could result in costs of $11 billion to $13 billion for American consumers.
