The End of Duty-Free Low-Value Imports: What Companies Must Do Now to Prepare
-
juillet 24, 2025
-
For decades, the Section 321 de minimis rule has quietly underpinned global e-commerce and just-in-time retail.1 This provision allows commercial shipments valued under $800 to enter the United States duty-free and with minimal customs processing, fueling cross-border e-commerce growth, reducing landed costs, and setting the standard for near-instant delivery that consumers expect today.
That era is ending.
President Donald Trump’s recent executive order signals a sweeping change in U.S. trade policy: as of August 29, 2025, the commercial de minimis exception will be eliminated.2 For businesses that depend on low-value imports—from major e-commerce platforms to emerging direct-to-consumer brands—this marks a turning point. The repeal introduces a new landscape of increased import costs, expanded compliance requirements, and elevated operational risk.
Why It Matters
For years, the de minimis threshold has enabled companies to economically ship high volumes of low-value parcels directly from overseas to U.S. customers. Many businesses have optimized their supply chains, warehousing strategies, and supplier relationships around this advantage.
When the commercial exemption disappears:
- Duties will apply to every shipment, regardless of value.
- Each shipment will require a formal customs entry, adding time, cost, and paperwork.
- Companies will face increased scrutiny, with stricter penalties for misuse and false declarations.
- Supply chains designed for speed and margin protection will have to adapt — quickly.
What Companies Should Do Now
The end of duty-free status for low-value shipments won’t sink a company overnight, but failing to prepare might. Companies that act now can manage the cost shifts and protect margins. Those that wait risk sudden expenses, customs delays, and penalties.
Strategic next steps to take today:
Review Sourcing and Fulfillment
- Evaluate shifting certain stock-keeping units (“SKUs”) to domestic or near-shore suppliers where feasible.
- Explore opportunities to consolidate shipments to reduce per-unit costs.
- Assess whether current inventory levels provide sufficient buffer for potential customs delays.
Strengthen Trade Compliance
- Ensure you have solid valuation, origin, and admissibility controls in place.
- Train staff and partners to avoid misclassification or underreporting.
- Be prepared for more frequent audits and tougher enforcement.
Streamline Customs Processes
- Evaluate your customs broker network, systems, and data capabilities to handle higher entry volumes efficiently.
- Automate trade documentation and data flows to minimize delays and manual errors.
- Revisit International Commercial Terms, shipping terms, and supplier contracts, clarifying who is responsible for duties and compliance.
Explore Duty Mitigation Tools
- Manage duty costs and improve cash flow using options such as duty drawback, bonded warehouses, consolidation hubs, and Foreign-Trade Zones.
- Model various scenarios now, as implementing effectively can require significant lead time.
Engage Leadership Early
- Understand that this shift affects more than the trade compliance function; it impacts procurement, pricing, customer service, and finance.
- Make sure leadership understands the stakes and approves the resources needed to adapt in time.
The Window Is Closing
With an effective date of August 29, 2025, companies have time, but the opportunity for action is limited. Rebuilding supply chains, upgrading systems, training teams, and securing new duty-saving tools takes months, or more likely, years.
By acting now, companies can reevaluate shipping and fulfillment strategies, strengthen supply chain relationships, and safeguard their competitive edge. Delaying action could result in avoidable financial setbacks or losses and eroded customer trust if disruptions arise.
Turning Change into Advantage
The end of the de minimis commercial privilege is a major shift, but not the end of efficient cross-border trade. Companies that plan ahead and act decisively will redesign their supply chains for resilience, compliance, and cost control in a more demanding environment.
The “free ride” on low-value imports is ending, but companies that plan now can turn disruption into strategic advantage and keep global trade moving forward.
Footnotes:
1: “Section 321 Programs”, U.S. Customs and Border Protection (July 17, 2025).
2: “H.R.1 - One Big Beautiful Bill Act”, Congress.gov (July 17, 2025), Section 70531.
Related Insights
Related Information
Published
juillet 24, 2025
Key Contacts
Senior Managing Director