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On August 29th, the U.S. de minimis exemption officially ended. Put in place in 1938, the policy allowed shipments valued under $800 to enter the country duty free and with minimal paperwork. Originally intended to simplify low-value imports, de minimis was heavily used by e-commerce companies that were shipping millions of packages into the U.S. each day without tariffs.
The suspension of de minimis marks a turning point for supply chains. Importers, retailers and logistics providers now face higher costs and more compliance steps for goods that once moved freely. The change is expected to disrupt shipping patterns and force companies to rethink any sourcing, fulfillment or distribution strategies that were designed around the exemption.
The move is being welcomed by some who see it as leveling the playing field, but others warn it will raise costs and slow trade. “By suspending de minimis, the federal government is seeking to close the gap between U.S. companies and foreign sellers,” NAFTZ’s Jeffrey J. Tafel writes in “What the End of the 'De Minimis Exemption' Means for U.S. Trade.” “The decision reflects growing concern about how the system was being used and its impact on domestic operations.”
In an interview with NBC News, EY’s Lynlee Brown warned that the sudden change “is about to probably cause a bit of pandemonium,” adding that it brings financial, operational and compliance challenges because shipments once treated as informal entries will now require full customs scrutiny.
Citing research from the National Bureau of Economic Research, NBC estimates that the end of de minimis could cost U.S. consumers at least $10.9 billion (or $136 per family). “The research found low-income and minority consumers would feel the biggest impact as they rely more on the cheaper, imported purchases,” it adds.
Measuring the Impacts
De minimis has been in place for nearly 90 years. It started at $10 and has been bumped up several times until its increase to $800 in 2015. Its demise is already driving some short-term disruptions (e.g., several postal services suspended shipments ahead of the rollback), but the bigger impact will show up over time. Manufacturers that rely on small, fast-moving imports must reassess inventory practices, for example, and retailers have to determine how much of the added cost to absorb or pass along to customers. Logistics and transportation networks will also have to adapt to new customs requirements.
So far, the end of de minimis is hitting hardest at the small and midsized firms that depended on it to keep costs down. “Basically, everything will now be subject to tariffs—it’s going to be a very real concern for small businesses,” CBIA president and CEO Chris DiPentima told the Connecticut Business and Industry Association. He warned that the change will drive up prices and add major administrative burdens, especially for companies without the scale to absorb them.
The effects extend beyond retail. In “Navigating the New Trade Reality: How De Minimis Ends a Supply Chain Era,” freight forwarder The ILS Company discusses the potential impact on industrial supply chains. Manufacturers that once relied on small, fast shipments of parts now face longer delays and new compliance steps.
Aerospace, automotive, medical and mining companies all depend on low-value components that are suddenly subject to full customs procedures. That added friction can stall production lines and increase costs on everything from bolts to diagnostic equipment.
Steps to Take Now
The elimination of de minimis also places a bigger emphasis on compliance and visibility, mainly because sub-$800 shipments were previously subjected to few (if any) regulations and inspections. With informal parcel entries gone, companies must be ready for full customs oversight. “Navigating this new landscape requires an in-depth understanding of complex trade regulations,” ILS cautions.
To shippers that are navigating these new complexities, ILS recommends moving from parcel shipments to bulk imports, sourcing more inputs domestically or nearshore, and investing in stronger compliance systems. “The new trade reality is challenging, but it is also an opportunity,” the company adds. “Now is the time for companies to strengthen their supply chains, reduce long-term risks, and build a more resilient foundation for future growth.”
