President Donald Trump ended the de minimis shipping exemption on Friday — making online shopping costlier for US consumers. The change has raised costs and disrupted supply chain models for e-commerce companies, small businesses using online marketplaces and consumers. It has also left postal services around the world scrambling for clarity — with many forced to temporarily suspend shipping.
The Trump administration contends that the duty-free imports had made it easy for traffickers to send parcels containing fentanyl into the country. Various US retailers and industry groups had also opposed the exemption for giving an unfair advantage to foreign e-commerce companies and third-party sellers on Amazon. Reports citing experts however warn that the new policy could mean up to $ 13 billion in extra costs and lead to delayed shipping for consumers.
“President Trump’s ending of the deadly de minimis loophole will save thousands of American lives by restricting the flow of narcotics and other dangerous prohibited items, and add up to $10 billion a year in tariff revenues to our Treasury,” White House trade adviser Peter Navarro told reporters on Thursday.
No more cheap online shopping?
Cheap online shopping from overseas will no longer be possible for US consumers — with the new tariffs, customs fees, and shipping costs significantly increasing the purchase cost. Every package will now face tariffs at rates typically ranging from 10% to 50% depending on its origin. Retail experts estimate costs for regular consumers will go up by $10.9 billion per year, averaging $136 more per household — disproportionately impacting low-income shoppers who depend on these bargains
The de minimis exemption had previously led a cross-border ecommerce surge as American shoppers snapped up bargains. Such goods — from sites like Shein and Temu — as well as independent sellers on Etsy, eBay, and Shopify will be hit hardest by the ban. The newly imposed tariffs will also mean longer customs inspections and additional paperwork which can leader to slower shipping and higher operational costs for sellers and retailers.
The US policy change has also prompted several countries to suspend all postal services to the US — citing the immediate logistical, financial, and regulatory challenges for both national and private postal carriers. This will also curtail the options available for US consumers seeking low-priced imports.
What is the new policy?
The US Customs and Border Protection agency has now started collecting normal duty rates on all global parcel imports — regardless of value, country of origin, or mode of transportation. It offered a flat-rate duty option of $80 to $200 per package shipped from foreign postal agencies for six months. A senior administration official also told Reuters that the change was permanent, adding that any push to restore the exemptions for trusted trading partner countries was “dead on arrival.”
The de minimis exemption has been in place since 1938, starting at $5 for gift imports and was raised from $200 to $800 in 2015 to foster small business growth on e-commerce marketplaces. But direct shipments from China surged after President Donald Trump raised tariffs on Chinese goods during his first term, creating a new direct-to-consumer business model for e-commerce firms Shein and Temu.
The National Coalition of Textile Organizations estimated that the number of packages claiming the de minimis exemption jumped nearly 10-fold from 139 million in fiscal 2015 to 1.36 billion in fiscal 2024 – a rate of nearly 4 million per day.