CBP: De minimis duty-free treatment won't be available Aug, 29

CBP: De minimis duty-free treatment won't be available Aug, 29

The U.S. Customs and Border Protection (CBP) has announced that the de minimis duty-free treatment for low-value imports will cease on August 29, 2025. This change, part of President Donald Trump’s trade agenda, aims to make the nation less dependent on foreign goods and reset global trade dynamics through tariffs.

The de minimis exemption, which allows for duty-free treatment on imports valued at $800 or less, has been a longstanding policy in the U.S. However, the Trump administration argues that this exemption has been exploited by foreign businesses to evade tariffs and by criminals to smuggle contraband into the country [1]. The exemption, initially created in 1938 for imports valued at $1 or less, has been gradually increased to the current threshold of $800 [2].

The elimination of the de minimis rule will significantly impact small businesses and online shoppers. Imports previously entering the U.S. duty-free will now require customs vetting and be subject to their origin country’s applicable tariff rate, ranging from 10% to 50% [1]. For the next six months, carriers handling orders through the global mail network can opt for a flat duty of $80 to $200 per package instead of the value-based rate [1].

Several countries have responded to this change by temporarily suspending shipments to the U.S. Japan, Switzerland, and other nations have paused their U.S.-bound parcels due to confusion over processing and payment requirements [1]. This suspension is likely to disrupt supply chains and affect the availability of certain products for American consumers.

Small businesses, especially those relying on imported products, are expected to face higher costs. Kristin Trainor, owner of a boutique in Connecticut, anticipates that the end of de minimis will eliminate the affordability of her European apparel, potentially leading to higher prices and even closure of her business [1]. Similarly, Ken Huening, founder of CoverSeal, a protective cover manufacturer, will have to raise prices or end free shipping due to the new tariffs on Mexican imports [1].

Despite these challenges, the CBP maintains that the change is necessary to address the influx of drugs and illegal items into the U.S. through low-value imports. The de minimis rule has been a target for the Trump administration, which has cited national emergencies and trade deficits as justifications for the policy change [2].

In conclusion, the elimination of the de minimis duty-free treatment will have far-reaching effects on the U.S. economy, particularly for small businesses and online shoppers. While the CBP argues that the change is necessary to combat illegal imports, the practical impacts on supply chains and consumer affordability remain significant concerns.

References:
[1] https://www.pbs.org/newshour/nation/tariff-exemption-for-small-packages-ends-this-week
[2] https://michiganindependent.com/economy/trump-tariffs-end-of-de-minimis-exemption-to-cause-changes-for-online-shoppers/