A major shift in cross-border trade is around the corner.
The de minimis exemption, which has allowed low-value imports to bypass duties and taxes, is expiring this Friday, and businesses should brace for impact.
For years, the de minimis exemption helped streamline international eCommerce by cutting red tape and minimizing landed costs on shipments under a specified threshold. That’s about to change.
According to the U.S. Customs and Border Protection, over 800 million de minimis shipments entered the U.S. in 2023 alone, a sharp rise from pre-2016 levels when the threshold was raised from $200 to $800.
Importers, DTC brands, and 3PLs could face increased scrutiny, longer customs clearance times, and added operational complexity.
The end of the de minimis exemption marks a regulatory pivot aimed at closing tax loopholes and supporting local economies, but it also introduces fresh compliance challenges for global sellers.
Businesses relying on low-cost imports or drop shipping should move quickly to reassess pricing models, update shipping policies, and ensure customs compliance.
Once the de minimis exemption ends, efficiency and margin protection will depend on preparation, not reaction.
What is the De Minimis Exemption?
The de minimis exemption is a trade policy that allows low-value imported goods to enter a country without paying duties or taxes.
In the U.S., that threshold has been $800, making it easier and cheaper for eCommerce shipments to cross borders without the usual fees.
It’s been a key driver behind global dropshipping and cross-border logistics.
If you’re wondering about de minimis meaning in business terms, it refers to shipments so low in value, they’re considered not worth taxing.
The term itself is Latin, and the de minimis meaning is literally “about minimal things.” But with rising import volumes and shifting trade priorities, this once-minor rule is now making major headlines.
Why Did Trump Scrap the De Minimis Exemption?
In February, former President Donald Trump announced plans to end the de minimis exemption, citing China’s lack of action in curbing the flow of fentanyl into the United States.
By April, he signed an executive order removing duty-free access for low-value shipments from China and Hong Kong, effective May 2.
As of that date, any packages that previously fell under the de minimis threshold would now be subject to all relevant duties. Trump described the exemption as “a major scam hurting our country and small businesses,” emphasizing the need to close what he saw as an unfair loophole.
This move comes alongside newly imposed tariffs on Chinese goods, some reaching as high as 145%. In response, China has hit back with tariffs of up to 125% on US imports.
The ripple effect is expected to significantly impact small importers and US logistics networks that previously benefited from streamlined clearance.
The change marks a shift in trade policy that could reshape how US logistics operations manage low-value shipments, particularly those tied to e-commerce and cross-border supply chains.
Who Wins and Who Loses as the De Minimis Exemption Tightens?
As the rollback of the de minimis exemption takes effect, businesses across the supply chain are recalibrating.
U.S.-based brands may gain an edge as overseas competitors face rising costs, with fewer low-value De minimis entries clearing customs without added duties.
This shift brings both challenges and opportunities:
- Domestic manufacturers could see increased demand as low-cost imports become less competitive.
- Global brands may face consumer hesitation due to unexpected fees at checkout.
- Smaller retailers with tight margins could struggle to adjust supply chains quickly.
How Newl Helps Brands Navigate De Minimis Challenges
With the de minimis exemption facing tighter restrictions, brands that rely on cross-border eCommerce must rethink how they manage fulfillment.
Newl’s 3PL warehousing and logistics network offers a cost-effective path forward, helping brands maintain agility and profitability as the landscape shifts.
Here’s how Newl supports brands during this transition:
1. Smarter Inventory Placement
By storing goods closer to end customers across Newl’s North American warehouse network, brands can reduce shipping distances and avoid delays often triggered by changes to the de minimis exemption.
2. Lower Last-Mile Expenses
Optimized warehouse locations shrink shipping zones, which helps cut costs and minimize the impact of higher duties on cross-border shipments.
3. Simplified fulfillment operations
From inventory control to faster order processing, Newl helps brands stay lean and responsive, especially as customs enforcement tightens.
Looking to stay competitive despite shifting regulations? Newl is here to help you adapt and thrive. Reach out today!
What’s Next?
As the policy landscape around the de minimis exemption continues to evolve, businesses should stay proactive.
Expect increased scrutiny on low-value imports, shifting consumer behavior, and mounting pressure to localize supply chains.
Retailers and importers may need to reevaluate sourcing strategies, pricing models, and fulfillment partners.
Staying ahead means more than reacting, it requires planning for a leaner, smarter logistics future.
Now’s the time to assess your operational playbook and prepare for a more regulated cross-border trade environment.