Understanding the Implications of the De Minimis Rule Change and What It Means for Importers, Retailers, and Trade Compliance Professionals
By Andrew Galloway, Senior Vice President, J.M. Rodgers Co.
The de minimis provision under 19 U.S.C. § 1321 allows for the duty-free entry of low-value shipments into the United States, with a current threshold of $800 per shipment. This rule has been a cornerstone of cross-border e-commerce, enabling businesses to ship goods directly to U.S. consumers without incurring customs duties or extensive paperwork.
Recent Policy Changes
In February 2025, an executive order was issued to eliminate the de minimis exemption for imports from China, Canada, and Mexico. The primary goals of this policy shift are:
- Addressing trade imbalances by reducing preferential treatment for low-value imports.
- Increasing customs revenue by ensuring all eligible imports are subject to tariffs.
- Enhancing enforcement measures to curb the flow of illicit goods into the U.S.
Impact on Trade and E-Commerce
Foreign Retailers
Many businesses that have relied on the de minimis rule to ship low-cost goods directly to U.S. consumers will now face higher costs due to tariffs and compliance requirements. This shift may result in price increases, longer shipping times, and logistical adjustments to accommodate the new regulations.
U.S. Businesses
Domestic retailers have long argued that the de minimis threshold provides an uneven playing field, allowing foreign competitors to bypass tariffs and regulatory requirements. The removal of this exemption could create a more competitive environment for U.S. businesses that have been subject to duties and compliance costs.
The Temporary Pause & Future Outlook
Following the executive order, the administration announced a temporary pause on eliminating de minimis to allow U.S. Customs and Border Protection (CBP) time to implement efficient processes for tariff collection on low-value shipments. However, this pause is explicitly temporary and contingent on the development of a comprehensive enforcement system.
Key Takeaways for Businesses
De Minimis Will Eventually Be Eliminated
- The order does not reverse the decision—only delays it.
- The exemption will end once CBP establishes a streamlined tariff collection process.
Preparation Period for Importers & Retailers
- Companies should assess supply chains and explore alternatives (e.g., domestic warehousing or new fulfillment strategies).
- Importers and customs brokers should prepare for increased compliance requirements and potential shipment delays.
Enhanced Trade Enforcement & Revenue Collection
- The U.S. is moving toward more stringent oversight of low-value imports.
- Digital tracking, stricter customs declarations, and enhanced compliance measures are expected.
Uncertain Timeline
- No firm date has been set for lifting the pause.
- The de minimis rule could remain in place for months or longer, depending on how quickly enforcement systems are finalized.
Bottom Line
The pause does not mean the de minimis exemption is safe—only that it remains in effect temporarily. Businesses should start preparing for a future where low-value imports from China, Mexico, and Canada will be subject to tariffs. The ultimate impact will depend on how efficiently CBP and the Department of Commerce implement their enforcement infrastructure.
