The “de minimis” U.S. tariff exemption for package shipments under $800 just ended on August 29th, 2025. This rule aimed to avoid the administrative cost of collecting small amounts of tax and facilitated global e-commerce by enabling companies like Shein and Temu to ship directly to consumers.
However, concerns about circumvention and national security led to the exemption’s suspension for goods from China in 2025, and a broader suspension for all other countries took effect in late August 2025. This, ultimately, raises costs and disrupts the supply chains for e-commerce companies. It’s also a hard hit for smaller and mid-size businesses.
“The end of the ‘de minimis’ exemption for low-value parcels under $800 per day is causing immense disruption for small and medium-sized businesses and individual consumers, including in the e-commerce context,” says Augustine Lo, partner at international law firm Dorsey & Whitney.
Implications for Small Businesses
Previously exempt from import duties, parties to these low-value transactions now must factor import duties into their pricing, according to Lo. They may also need to contend with more burdensome import declarations that they previously avoided.
“By contrast, there should be minimal impact for larger businesses that did not previously use that exemption for low-value parcels,” Lo says. “Those larger companies generally are already set up to meet the requirements that smaller companies now face. Most large-scale operations have familiarity with customs law and have ready access to both internal resources and assistance from outside consultants and legal counsel.”
All in all, small and medium-sized businesses are going to face the following challenges:
- Increased costs for consumers: Tariffs are now applied to previously exempt shipments, which may be passed on to consumers through higher prices.
- Slower deliveries: Shippers must now declare each package to U.S. Customs, which may increase processing times and lead to delays.
- Shift in e-commerce: The exemption’s removal could significantly impact business models for online retailers, particularly those relying on direct-from-manufacturer sales, like Shein and Temu.
“This change in government policy forces small businesses to behave more like larger companies, but potentially with less resources to meet that challenge. Many companies are reevaluating their operations in view of this new regulatory landscape,” explains Lo. “Because consumers want bargains, many companies may choose to bite the bullet and incur the increased import costs if they could remain competitive.”
