What Is the De Minimis Tariff Exemption?

The de minimis rule was introduced in 1938, a few years after the Tariff Act of 1930. The exemption aimed to help small businesses and consumers avoid duties when importing goods into the US valued under $800.

Low-value goods will no longer be able to enter the US duty-free. For the next six months, packages will be charged based on the product’s country of origin and the item type. After that, all shipments will face the country-specific US tariff rates.

This extra cost will fall on businesses importing goods to sell and the US consumers buying them.

Popular ecommerce sites, such as Shein and Temu (both based in China), had already been affected by the end of de minimis after Trump removed the loophole in April for China only. Now, all countries will be impacted.

The White House claimed the de minimis treatment was unfair and a “catastrophic loophole,” with countries exploiting the system to flood America with drugs and dangerous goods.

The Department of Homeland Security Assistant Secretary Tricia McLaughlin spoke on the executive order:

“For decades, bad actors have taken advantage of America’s de minimis process by smuggling in deadly narcotics, harmful products, and other contraband in hidden products. This loophole led to the death of thousands of Americans, fueled the opioid crisis, and harmed U.S. consumers. This decision to end de minimis will save American lives, increase revenue, and protect the American consumer and entrepreneur.”

According to the same statement, 98% of narcotics and 97% of counterfeit items were seized from de minimis shipments in 2024.

Unfortunately, small and large businesses in the US that rely on imported goods will also be hit hard by the removal of de minimis, with smaller companies struggling the most to absorb the cost of rising import fees. Though if US-based businesses can rely on domestic products and storage solutions, they’ll likely thrive in this new environment.

The executive order signed on Wednesday will be in effect until July 2027, when Trump’s OBBBA (One Big Beautiful Bill Act) permanently ends the de minimis exemption.