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In a move that could impact small businesses and online shoppers alike, the United States has revoked the duty-free status for low-value imports, a decision that forms part of President Donald Trump's trade agenda. This change, effective as of 12:01 a.m. Eastern Daylight Time, has significant implications for businesses like Kristin Trainor's boutique, Diesel and Lulu's, in Avon, Connecticut, and Ken Huening's CoverSeal, based in Los Gatos, California.
Kristin Trainor, who operates a 3-year-old boutique, stocks over 70% of women's clothes and accessories from small fashion houses in France, Italy, and Spain. With the end of the de minimis rule, a simple linen sundress that cost $30 wholesale at the beginning of the year is estimated to rise to $43 next month due to added customs and duty charges. Trainor places small batch orders each week that fall under the $800 threshold, but the end of de minimis could increase costs and eliminate affordability.
For CoverSeal, the withdrawal of the de minimis rule affects all countries, including Mexico and Canada, where the company manufactures its protective covers for cars, motorcycles, grills, and patio furniture. Ken Huening, the owner, may have to raise prices or end free shipping due to the taxation of his products when they are sent from Mexico to U.S. customers. Huening has looked at setting up a U.S. production and logistics network but says domestic sewing facilities and textile manufacturers do not exist for the engineered fabric used in CoverSeal's products.
The de minimis exemption, which started in 1938, allowed duty-free imports with a retail value of $1 or less. However, the number of shipments claiming de minimis treatment has significantly increased over the years, with 1.36 billion packages worth $64.6 billion reaching the U.S. in 2021. This surge has led to more than 30 countries temporarily suspending U.S.-bound packages due to insufficient time to collect duties on small parcels.
Shannen Knight, the owner of A Sight For Sport Eyes, an online store and shop in West Linn, Oregon, routinely receives shipments from the U.K., the Netherlands, and Italy that fell under the de minimis dollar cutoff. Knight estimates she would need to raise the retail price of the rugby goggles she gets from Italy by 50% due to the end of de minimis.
From May 2, 2025, imports from China and from August 29, 2025, for all countries worldwide, will no longer be subject to the de minimis rule. For the next six months, mail carriers can apply a flat duty of $80 to $200 to packages sent through the global postal network. Purchases that previously entered the U.S. without customs clearance will now require vetting and be subject to their origin country's applicable tariff rate, ranging from 10% to 50%.
These changes could bring new costs and delays for small businesses and online shoppers, potentially leading to increased prices or reduced availability of certain products. It remains to be seen how businesses like Trainor's and Huening's will adapt to these new circumstances.
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