The End of the De Minimis Exemption: What Importers Need to Know

For years, SMB importers shipping into the U.S. benefited from a quiet shortcut. Under the de minimis rule (Section 321), any shipment valued under $800 could enter duty-free with minimal paperwork. Not surprisingly, de minimis began to fuel thousands of small ecommerce businesses – it was simple, fast, and cheap.

Then, almost overnight, that system ended.

In a recent industry webinar, customs brokerage Clearit’s President Adam Lewis and Business Development Manager James Stewart broke down what the end of de minimis means for importers, and how to turn a potential disaster into a manageable transition.

When “easy mode” disappeared

The de minimis system had been “the easy button” for small shippers, James explained. Businesses could ship directly to U.S. customers through couriers like UPS or FedEx without thinking about duties, classifications, or even importer registrations. Now, that landscape is gone, replaced by new customs requirements and stricter enforcement.

For importers who built their supply chains around one-off shipments, the impact has been dramatic: “Some businesses are finding that the cost of delivering an item now exceeds the value of the product itself,” he said.

Why compliance suddenly matters

The de minimis rule, also known as Section 321, was originally implemented in the 1930s because the cost to the government of collecting duties and taxes on very small shipments was higher than the revenue those duties generated. Back then, the limit was set at $1, with anything higher requiring regular customs entries.

That threshold stayed low for decades, then rose to around $200 in 1993, and in 2016, the Obama administration increased it to $800. According to Adam, that change “really underpinned the explosion of B2C commerce in the United States” – online sellers could now send small orders directly to U.S. customers without dealing with customs.

But the same policy eventually created problems. When the first Trump administration introduced Section 301 tariffs on Chinese goods in 2017-2018, many importers began routing more freight through the de minimis channel to avoid those 7.5-25% duties.

> “We’re going from a zero-compliance landscape to compliance in overdrive.” – Adam Lewis, President, Clearit

Adapting to the end of de minimis

Step #1: Own the process

Importers are the ones responsible for getting compliance right – not forwarders, carriers, or anyone else.

Step #2: Master compliance

Adam broke compliance into three pillars: accurate classification (HS codes), correct valuation, and full country-of-origin documentation.

Step #3: Get aligned with providers early

Importers must provide customs brokers with all the necessary information from the start: classifications, valuations, country-of-origin data, and any PGA documentation.

Step #4: Rethink how goods cross the border

• Consolidate shipments: Instead of shipping hundreds of small parcels individually, consolidate them into one larger shipment for customs clearance.
• Work with US-based 3PLs: Once goods are already stateside, last-mile shipping becomes cheaper, faster, and more predictable.
• Update your supply chain in phases: Test new setups with a beta shipment.

> “You can consolidate hundreds of packages into a single shipment and pay a $85 or $100 brokerage fee instead of $25 or $35 per package. It’s really the only way to go now.” – Adam Lewis, President, Clearit

Step #5: Explore other ways to save time and money

Once your classification is solid, look into bonded warehouses, duty drawbacks, and supplier negotiations. “There are billions of dollars in duty recovery going unclaimed,” Adam noted.

Step #6: Avoid traps

• Authorities are watching closely for transshipment and undervaluation schemes.
• If a supplier offers to issue a “discounted invoice” to reduce duties, that’s not a favor – it’s a liability.

> “If a vendor ever tries to give you a reduced invoice to say, ‘Hey, we did you a favor,’ they are not doing you a favor, and they could be compromising your business transactions.” – James Stewart, Business Development Manager, Clearit

Turning compliance into an advantage

The end of de minimis has been disruptive, but businesses that adapt can come out stronger. By consolidating shipments, aligning with reliable 3PL and brokerage partners, and becoming vigilant about compliance, small importers can use these requirements to help grow more stable, scalable businesses.

TL;DR

• The de minimis change affects low-value consignments that previously cleared without duty.
• The practical impact is on cost per parcel and on the data required to clear.
• Confirm the current scope and effective position from the official source before changing a fulfilment model.

What the change affects for low-value shipments

Area	What to reconsider
Cost per parcel	Duty and processing costs that did not previously apply
Clearance data	The entry information now required for each consignment
Fulfilment model	Whether parcel-by-parcel or consolidated clearance is more efficient
Customer pricing	Whether the change is passed through or absorbed

Confirm current scope: de minimis treatment and any transition arrangements have changed more than once. Verify the position in force for your shipment date from the official source.

Frequently asked questions

What does the end of de minimis mean for my shipments?

Low-value consignments that previously cleared without duty may now attract duty and require additional clearance data. Confirm the current position for your shipment date from the official source.

Should I switch from parcel shipping to consolidated freight?

Compare total landed cost and clearance workload for both models. The right answer depends on your volume, product value and destination.

How do I prepare for a de minimis change?

Model the new cost per parcel, confirm the clearance data you can provide, and decide in advance whether the change is passed through or absorbed.