(NewsNation) — Tariff exemptions for packages shipped to the U.S. worth $800 or less are set to end this week.
In July, President Donald Trump signed an executive order to suspend the “de minimis” tax exemption rule, which has led an increasing number of postal carriers worldwide to suspend package deliveries to the U.S.
On Friday, Aug. 29, imported packages valued under $800 will no longer be duty-free and will be subject to country-specific tariffs.
Letters and personal gifts worth under $100, however, remain unaffected by the impending changes.
What is the de minimis exemption?
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.
The rule has been amended several times over the years, and in 2016, the exemption was raised to include products valued at or under $800.
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 the CBP.
Why is the U.S. suspending de minimis?
There is bipartisan support for restructuring or eliminating de minimis shipments, as some argue they give international manufacturers an unfair advantage and make it easier for drugs and unwanted goods to enter the country, as they benefit from expedited processing and less oversight.
Both the Biden and Trump administrations have expressed concern about the potentially negative impacts of de minimis shipments.
The Trump administration’s July executive order argued, “the risks of evasion, deception, and illicit-drug importation are particularly high for low-value articles that have been eligible for duty-free de minimis treatment.”
Right before Trump took office at the beginning of 2025, the U.S. Customs and Border Protection announced a Notice of Proposed Rulemaking aimed at tightening the scope of the de minimis exemptions. The notice claimed that international companies take advantage of the tariff loophole to the detriment of U.S. businesses.
“The exemption of these goods from duties or taxes has undermined American businesses and workers and flooded our ports of entry with foreign-made products,” former Secretary of Homeland Security Alejandro N. Mayorkas said.
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% of their value.
Now, every country is set to lose the benefits of the exemption.
How are countries reacting?
In response to the suspension of de minimis exemptions, postal services around the world are announcing plans to halt certain shipments to the U.S., according to previous NewsNation reporting.
Europe’s largest shipping provider, DHL, announced that it cannot ship business parcels to the U.S. until details surrounding the new duties are clarified.
Germany, Denmark, Sweden and Italy are among the countries that have already stopped shipping many packages to the U.S.
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.
It’s unclear how long the de minimis exemption will be suspended for. However, until details surrounding its enforcement are clarified, more and more countries will likely continue to cease certain shipments to the U.S.
What does it mean for businesses?
The suspension of de minimis exemptions will likely impact the global economy significantly.
Global e-commerce businesses, particularly fast fashion brands like Shein and Temu, will be greatly affected by the shift in policy.
These companies have already begun increasing prices on their products in response to Trump’s trade policies.
A 2023 report by the House Select Committee on China’s Communist Party found that Shein and Temu are responsible for more than 30% of all packages shipped to the U.S. daily under the de minimis exemption.
Companies that depend on foreign products for their operations, such as drop shippers who sell items through third-party manufacturers, are also likely to encounter profit concerns.
American consumers may suffer
With companies around the world likely to increase their prices to reflect the tumultuous trade policies, American consumers could face the brunt of the impact from the elimination of de minimis worldwide.
Research suggests that eliminating the exemption could result in costs of $11 billion to $13 billion for American consumers, disproportionately hurting low-income and minority households, as previously reported by NewsNation.
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