Customs change: Exemption from U.S. tariffs is now limited to parcels valued over $800

The duty-free status for low-value imports in the United States came to an end last Friday, marking a significant shift in President Donald Trump's agenda. This move, which eliminated a customs exemption for international shipments worth $800 or less, has far-reaching implications for businesses and consumers alike.

One of the sectors most affected by this change is retail. Shannen Knight, the owner of A Sight For Sport Eyes in West Linn, Oregon, imports hard-to-find sports goggles and glasses. She estimates that she would need to raise the retail price of the rugby goggles she gets from Italy by 50% due to the end of the de minimis rule. A simple linen sundress that cost $30 wholesale at the beginning of the year will rise to $43 next month.

Kristin Trainor, who runs the 3-year-old boutique Diesel and Lulu's in Avon, Connecticut, places small batch orders each week that fall under the $800 threshold. However, she fears her customers will balk at higher prices and is considering closing the boutique. More than 70% of the women's clothes and accessories at Diesel and Lulu's come from small fashion houses in France, Italy, and Spain.

The change also impacts businesses manufacturing goods in the U.S. Ken Huening, who started CoverSeal, a business making and selling protective covers for cars, motorcycles, grills, and patio furniture, in 2020, will either have to raise prices or end free shipping now that his products will be taxed when they are sent from Mexico to U.S. customers due to the withdrawal of the de minimis rule. CoverSeal's products are manufactured in Mexico and China.

The de minimis exemption, which started in 1938 as a way to save the federal government the time and expense of collecting duties on imported goods with a retail value of $1 or less, has been a contentious issue. Proponents of limiting the exemption argue that it has served as a way for China-founded retail platforms to flood the U.S. with low-priced goods.

The new policy is not without controversy. More than 30 countries have temporarily suspended sending some or most U.S.-bound packages due to the new tariffs. Several countries, including Austria, Scandinavia, Belgium, and a total of 88 countries worldwide, have temporarily stopped sending packages to the United States following the U.S. government’s removal of the duty-free threshold for low-value imports starting August 29, 2025.

For the next six months, mail carriers can apply a flat duty of $80 to $200 to packages sent through the global postal network. After six months, both mailed parcels and those handled by private courier services will be subject to the value-based tariff rate.

About 60% of the shipments coming to the U.S. originated from China and Hong Kong. The end of the de minimis rule will undoubtedly reshape the U.S. import landscape, affecting businesses and consumers alike.