How ending the de minimis rule is set to disrupt global retail logistics
Subscribe to our free newsletter today to keep up to date with the latest supply chain industry news.
For years, the de minimis exemption allowed international shipments under $800 to enter the United States without duties. Enacted in 2016, it was designed to streamline cross-border e-commerce and reduce customs friction. The exemption became central to platforms such as Shein and Temu, which relied heavily on direct-to-consumer shipping from China.
On May 2, 2025, that framework changed. President Trump issued an executive order that ended the exemption for goods from China and Hong Kong. All packages from these origins, regardless of value, are now subject to customs procedures and applicable duties. The administration cited national security concerns, illicit drug shipments, and trade imbalances as key drivers.
This marks a significant shift in US trade policy. Low-value imports from two of the largest exporters now face the same scrutiny as larger shipments, with consequences for the global retail ecosystem.
What this means for e-commerce platforms and the supply chains behind them
The impact on high-volume e-commerce platforms is immediate. Chinese sellers with little physical presence in the United States must now adjust supply strategies or absorb rising costs. Shein and Temu are expanding US warehousing and forming third-party logistics partnerships to maintain delivery speeds and pricing.
These changes challenge the supply chains that relied on just-in-time inventory and cross-border fulfillment. Direct international shipping is being replaced by hybrid models that combine bulk importation, domestic storage, and regional distribution. This requires additional capital, deeper customs integration, and local logistics coordination.
Major logistics providers are adapting as well. FedEx and UPS, which previously handled millions of low-value parcels, are facing increased demand for customs clearance services. A system once optimized for efficiency must now operate under new compliance constraints.
Full repeal and global implications for trade
On July 4, 2025, Trump signed the One Big Beautiful Bill Act, which mandates the elimination of the de minimis exemption for all countries by July 1, 2027. This follows a second executive order issued on July 30, which suspends the exemption for all international commercial shipments starting August 29, 2025.
The timeline gives businesses a short window to realign logistics. Global sellers must either pay full tariffs or invest in domestic fulfillment networks. Supply routes that once prioritized minimal regulation must now support compliant, documented trade.
From a supply chain perspective, the changes are reshaping logistics hubs and customs operations. US ports, inland distribution centers, and postal systems will see shifts in volume and processing requirements. The exemption rollback removes one of the last major informal entry channels into the US retail market.
How new tariffs affect cross-border fulfillment
Removing the exemption increases documentation, processing times, and compliance obligations. Shipments must now include detailed classification, valuation, and origin data. For small exporters, the learning curve is steep and administrative costs are rising.
Carriers expect longer customs clearance times. More packages will require full inspection, increasing the burden on Customs and Border Protection and slowing delivery times. Brokerage fees and carrier surcharges are also likely to rise.
Postal shipments now incur a flat-rate duty, $25 per item, increasing to $50 in July. Commercial carrier shipments face standard tariffs, with some products taxed above 100 percent. No distinctions are made between product categories, making compliance universal.
Domestic US retailers are positioned to benefit. By removing a cost advantage from foreign competitors, the policy levels the competitive landscape. US manufacturers and importers who follow standard compliance protocols stand to gain market share.
Foreign exporters, especially those who relied on tax-free access, face rising costs. US consumers will likely see price increases and reduced access to low-cost goods. Platforms may absorb some of the costs, but pass-through is expected.
Sources: