On July 30, 2025, President Trump signed an Executive Order of critical value that will reshape the entire framework for cross-border low-value imports. This Executive Order serves as the foundation for the new cross-border e-commerce ecosystem, which will facilitate the importation of products to US customers.
This is one of those decisions that will have a significant impact on the global supply chain in terms of e-commerce sales. The ending of the US de minimis exemption, which is one of the highest worldwide, practically means that goods imported from selected countries will face import duties and taxes.
The era of simplified customs clearance for the products originating from these countries will end, and they will need to pass the “ordinary” customs clearance procedures. US customers will most likely bear the costs of the increased prices or seek a domestic solution.
De-minimis Exemption
The de minimis exemption isn’t a customs-based tax provision applicable only in the US. Most countries worldwide have set a de minimis exemption. This sort of exemption permits simplified customs clearance for low-value products shipped from outside the country to pass the borders and arrive at the customer without too much “hassle” with the customs officials.
The de minimis exemption exempts low-value imports from customs duties and/or import taxes, simplifies the import procedure, and accelerates the arrival of goods to the customer. E-commerce online businesses are the primary beneficiaries of the de minimis provision.
The US de minimis exemption was a key driver of the rapid growth of the e-commerce industry in the US. The US de minimis threshold is one of the highest in the world. The threshold is USD 800. This means that most products shipped from various regions can be imported into the US and shipped to end customers without the imposition of customs duties or import taxes.
This guarantees overseas online merchants a practical advantage over local producers. E-commerce strongholds like Temu or Shein, as well as others from different countries, had the opportunity to ship their products to US customers and pass customs clearance quickly, without incurring any additional costs.
The de minimis benefit applies to both postal shipments and low-value shipments. The economic importance of the de minimis US can be seen in the exponential growth of the parcels shipped to the US from 2015 to 2024. The growth was 600% from approximately 140 million to 1.36 billion annually. In 2023, the peak year, the average rate of de minimis parcels was 4 million per day.
End of De minimis exemption
Timeline of changes:
- Effective May 2, 2025, the US administration ended the de minimis exemption for imports from China and Hong Kong.
- Effective August 29, 2025, an executive order signed by President Trump introduces a global suspension of the de minimis exemption, which will be enforced individually on a country-by-country basis.
- Effective July 1, 2027, the One Big Beautiful Bill Act(OBBBA) permanently repealed the de minimis exemption for all shipments.
US Imports post De Minimis Exemption
The de minimis exemption for low-value commercial parcels and postal shipments is practically eliminated, meaning that online vendors will now face new customs clearance requirements, import duties, or import taxes. Customers will wait longer for the arrival of online-ordered and shipped products.
The ending of the de minimis exemption will significantly reshape the administrative and commercial outlook for the online sellers. The prices of the products will grow in alignment with the additional customs duties that the seller will need to consider.
Impacts on Postal Shipments and Low-Value Entries
Online vendors that ship their products through US couriers, such as FedEx or UPS, will be obligated to pay all applicable customs duties and use the correct entry type.
Those who use international shipping methods have the option to adhere to the 6-month grace period. During the grace period, shippers could use one of the flat-rate tariffs based on the country of origin and their effective date of entry.
Trump’s Executive Order
The executive order, which takes effect on August 29, 2025, formally ends the de minimis exemption for shipments originating from China, Hong Kong, Canada, and Mexico. When it comes to other jurisdictions, it’s stated that the rules will be applied on an individual basis.
Severe Penalties
The e-commerce vendors will face severe penalties if they don’t align with the new adequate provisions.
- For the first offense, the penalty is in the range of USD 5000
- For each repeated offense up to USD 10,000
How to Stay Compliant
Overseas online vendors need to become familiar with the new rules for importing low-value shipments into the US in detail. There is a need to approach this substantive tax and customs change from both a legal and a business perspective. The enforcement of the new types of penalties should raise awareness more than before.
- Look for trusted third-party service providers both in tax and customs
- Search for credible freight partners familiar with the new rules
- Develop or integrate with online tax apps that can clearly show to the end customer the final price(duties, taxes)
Overseas e-commerce vendors, as well as e-commerce marketplaces that facilitate the supplies of low-value goods to US customers, will very soon experience a new customs framework for their shipments. This change will undoubtedly influence the speed of customs clearance, administrative burden, compliance costs, and, most importantly for the customer, the total price for the parcel.
Author: Aleksandar Delic
The enforcement of the new rules and the imposition of customs duties on low-value shipments will impact the entire supply chain of these product categories. This will likely result in internal business model adaptation by e-commerce marketplaces, such as opening warehouses in the US to speed the shipping process.
Indirect Tax Manager – E-Commerce
The de minimis exemption streamlines customs clearance for low-value imports, enabling goods to enter the US without incurring customs duties or taxes. This benefited e-commerce businesses by reducing costs and speeding up delivery times.
The de minimis exemption will end on August 29, 2025, for countries including China, Hong Kong, Canada, and Mexico. Other countries will follow with individual enforcement based on specific timelines.
US customers will face longer shipping times and higher prices as additional customs duties and taxes will be imposed on low-value imports from affected countries.
E-commerce vendors who fail to comply with the new import rules will face penalties, starting at $5,000 for the first offense, with repeated violations leading to penalties up to $10,000.
Overseas vendors should familiarize themselves with the new customs and tax regulations, seek trusted third-party services, and integrate online tax apps to provide customers with transparent pricing
Trump’s Executive Order will reshape the global e-commerce supply chain by ending the de minimis exemption, resulting in higher costs for overseas vendors and longer delivery times for US consumers.