US tariff and shipping policy changes: Navigating the end of the de minimis exemption

On August 29, 2025, the US government suspended the de minimis exemption for goods imported from all countries. This exemption previously allowed international shipments valued under $800 to enter the US duty-free and with simplified customs processing. 

This change is most likely to impact online shoppers and small businesses in the US who source supplies from overseas. The US currently processes around four million de minimis packages per day.

As of August 29, virtually all shipments entering the United States are now subject to duties and require a customs entry. 

At the time of writing, many national postal services like Deutsche Post and Royal Mail are pausing shipments to the US due to regulatory uncertainty. According to NPR, they now need to figure out how to handle new paperwork for millions of packages, and how to collect money for duties and taxes.

Merchants from many countries will continue to ship documents, which are still exempt, and export via express services.

In this post, we’ll explain what tariffs are and how they impact global commerce. Then, we’ll provide an overview of the recent changes and how both US and non-US ecommerce businesses can adapt and move forward. 

Tariffs are import taxes that increase the cost of foreign goods relative to domestic alternatives. These taxes are paid by the importing party (either the business or consumer), and the resulting funds are then passed to the importing country’s department of finance — in this case, the US Treasury.

For US merchants, import tariffs can sometimes provide a competitive advantage — they increase the cost of international competitors’ goods while leaving the cost of domestically produced goods unchanged.

On the other hand, both international businesses that sell to US customers and small US businesses that import products from outside the US for resale will face increased difficulties. 

When US customers buy from an international merchant shipping to the US, the total cost now includes newly applied duties and customs processing fees, leading to higher prices and potential delays.

When customers buy from domestic businesses, they can receive a similar product with faster shipping, no import fees, and simplified returns.

Duties vs. Taxes — what’s the difference?

Provided by ShipStation

Duties

These are fees imposed specifically on imported goods, often based on the product’s classification and value.

Taxes

These include broader taxes such as the Value Added Tax (VAT) or Goods and Services Tax (GST), which apply to both imported and domestically produced goods. Tariffs and duties are both considered indirect taxes.

Before

• This exception previously allowed international shipments valued under $800 to enter the US duty-free and with simplified customs processing. A 10-digit HTS code was recommended but not mandatory. Fast delivery and customs times allowed international merchants to compete with domestic US fulfillment. 
• All US shipments above the de minimis threshold required customs documentation, including 10-digit HTS classification codes.

After

• All shipments to the US now require a customs entry and are subject to duties and taxes. Shipments above $2,500 require formal customs entry, while shipments below require an informal entry. The informal entry is significantly more complex than the previous de minimis process.
• A 10-digit HTS code is now required for all non-postal shipments (e.g. via couriers like UPS) to calculate duties. For postal shipments, accurate country of origin and item value are the primary data points required.
• Carriers and logistics partners must now post a customs bond to cover duty payments for low-value shipments. Merchants should ensure their shipping partners are fully compliant with these new bonding rules to avoid shipment holds.
• Duties now vary based on the country of origin and the items being imported. According to ShipStation, courier shipments will face full duties and tariffs and postal shipments will be assessed by either:
  • Ad valorem duty: A percentage based on the country of origin tariff rate (IEEPA).
  • Specific duty: A flat rate between $80 and $200 per item, depending on the country’s tariff.
• Major national carriers like Deutsche Post and Royal Mail have suspended services due to regulatory uncertainty.
• Private carriers, including UPS and DHL Express, are continuing normal operations. While their shipments are also subject to new duties, they have robust systems in place to manage customs clearance.
• Longer customs processing times are expected, potentially causing delayed deliveries.
• Shipments of personal gifts valued at less than $100 and personal travel exemptions still remain, including $200 in personal items.

What the new tariffs mean for global ecommerce 

The end of the de minimis exemption introduces new duties, customs requirements, and shipping complexity for international sellers shipping into the US. This shift may reduce the volume of low-value international shipments, at least temporarily, creating changes in the competitive landscape. 

This change was applied to imports from China and Hong Kong in May of 2025, which resulted in a 43% decrease in low-value ecommerce shipments from China to the US, as reported by Reuters.

For US businesses: Opportunities and drawbacks of eliminating the de minimis exemption

For US merchants, this could mean less competition from some overseas direct-to-consumer brands. Domestic sellers may find opportunities to emphasize consumer advantages such as lower overall costs, simpler fulfillment, and fewer delivery risks associated with customs.

Many US merchants source products, materials, or components from overseas suppliers. New tariffs and suspended de minimis thresholds will increase landed costs, which can squeeze already thin margins.

Opportunities for US businesses following the elimination of the de minimis exemption

1. Increased cost of competitor goods

International competitors now face significantly higher delivered costs to US customers, which presents the risk that their customers will seek lower-priced domestic alternatives. 

2. Suspension of some international shipments

With several international retailers and carriers temporarily suspending shipments to the US while they adapt to the new rules, US merchants could experience a period of reduced global competition.

3. Access to new audiences seeking cheaper domestic alternatives

Customers who previously purchased from international stores may reconsider their options if they encounter higher prices, shipping delays, or uncertainty about customs clearance. In these cases, domestic sellers may be perceived as a more reliable alternative.

Drawbacks for US businesses due to the suspension of the de minimis exemption

1. Increased costs for small businesses offering imported products

US stores that import raw materials or small inventory batches will now face new customs costs and formal entry requirements. This increases the cost of supplies and can create operational challenges. 

2. Risk of supply chain issues due to paused shipments

Businesses that sell international goods may temporarily face stock issues, as international postal services are pausing shipments. 

The end of the de minimis exemption introduces new costs, compliance requirements, and shipping complexities for selling into the US. These changes may affect margins, operations, and customer experience. International merchants can adapt by reevaluating fulfillment models, pricing strategies, and customer communication.

Opportunities for non-US businesses following the elimination of the de minimis exemption

1. First-mover advantages

Businesses able to adapt quickly and appropriately to these changes will have an advantage over companies that choose to wait. For example, refocusing on local audiences or different international markets, ensuring compliance with US customs regulations like adding HTS codes to all products, informing customers of the upcoming change to the cost of the product and shipping times. 

2. Premium positioning becomes more viable as all international sellers face similar cost increases

Since costs rise for everyone, the relative price gap between low-end and premium offerings narrows. In brand and product descriptions, emphasize values and craftsmanship that may explain or justify higher prices. 

Drawbacks for non-US businesses due to the elimination of the de minimis exemption

1. Loss of US market share due to higher costs and wait times

All goods are now subject to duties, which significantly increases the final cost for US customers. For items sent through international postal services, this new cost could be a flat fee of $80, $160, or $200 per package, which can make low-cost goods prohibitively expensive. Some customers will be unwilling to wait longer or pay more to cover import fees. For niche verticals, this may be less of an issue, but those in more saturated verticals will likely see a larger loss in US orders. Merchants must either absorb these costs, eroding their margins, or pass them on to customers, which risks a sharp drop in conversion rates.

2. Increased operational complexity and compliance burdens

New customs requirements and 10-digit HTS code classifications may present operational challenges or delays, especially for small businesses. This transforms merchants from simple sellers into micro-importers, adding significant administrative overhead and risk of penalties or seized packages for errors. We recommend seeking guidance from tax and shipping experts such as Avalara or ShipStation to develop processes and adjust your operations.

3. Degraded customer experience and loss of trust

Merchants must now transparently manage import duties. If duties are not collected at checkout (a “Delivered Duty Paid” service), the shipping carrier is required to charge the customer upon delivery. Failing to clearly communicate this will lead to surprise fees, delays, and a negative customer experience. An Avalara survey indicates 75% of consumers will reconsider buying from a retailer after such an experience. This puts the merchant’s brand reputation and customer loyalty at severe risk.

Tariff response strategies for US ecommerce businesses

1. Increase ad spend in response to lower global competition 

Some international retailers may scale back advertising while shipments are suspended or slowed due to carrier and customs challenges. This could temporarily reduce competition in digital ad markets.

For US merchants, this may create an environment where their ads reach consumers more efficiently. Adjusting ad spend and refining keyword strategies around themes such as “US-based products”, “no customs delays”, or “fast shipping” can help position domestic sellers as a reliable option for shoppers concerned about duties, delivery times, or package uncertainty.

Recommended advertising tools for responding to new tariffs: 

2. Create content marketing campaigns highlighting US-based products 

Consider launching a content marketing campaign that educates your customers on the benefits of buying products made in the US in response to this new rule change (lower cost than international, faster shipping, easier returns).

You can create educational blogs, craft an email campaign highlighting your products, and inform your customers about the regulatory change through social media or email. 

Recommended marketing tools for responding to new tariffs:

3. Update your website and product page to highlight product origin

Update website copy and product descriptions to emphasize transparent pricing with no hidden customs fees or delivery surprises. Whether products are imported or domestically produced, customers will appreciate the transparency, especially for price increases on imported goods. 

To promote domestically produced goods, highlight how your products can be seen as duty-free alternatives to international options.

Consider creating dedicated “Made in the USA” product collections and landing pages that explain why customers will benefit from choosing domestic products. 

Tariff response strategies for non-US ecommerce businesses

If US sales represent a mission-critical portion of your revenue, immediate changes are required to prevent future revenue losses.

1. Assess the total impact of new US tariffs on your business

Understanding the financial impact of these changes is critical to determining your response strategy. Find or calculate the percentage of revenue that comes from US customers, and note the most popular products and current fulfillment time for that audience. 

2. Implement comprehensive duty and tax calculation

Aside from increased costs and shipping blocks, the greatest risk to your business is customer surprise and disappointment at delivery when unexpected duty fees appear. Install comprehensive duty and tax calculation solutions to display accurate total costs at checkout to set customer expectations. 

While this transparency may initially reduce conversion rates, it helps prevent chargebacks, negative reviews, and permanent customer loss.

Recommended tools for tax and shipping help:

3. Leverage WooCommerce partners to facilitate HTS compliance

Every US-bound shipment, regardless of value, now requires customs documentation, including a 10-digit HTS classification code and country of origin data.

This adds significant administrative overhead and risk of penalties or seized packages for errors.

Recommended tools for HTS compliance:

4. Build a multichannel strategy to diversify your fulfillment options 

“Third-party software solutions like ShipStation, combined with online marketplaces like Amazon Global Selling, offer businesses access to regional warehouses and micro-fulfillment centers across the globe. Prioritizing real-time tracking and delivery transparency is crucial, as consumers value these aspects highly when making purchasing decisions.”

— Cross-Border Ecommerce Made Easy: Leveraging Technology for Seamless Expansion, ShipStation

Learn more about syncing with top marketplaces with WooCommerce. 

There is still a high degree of uncertainty regarding US tariffs and custom regulations. As with the tariffs on China, regulations could still change in the near future. 

For now, we recommend US merchants use this competitive breathing room to invest in marketing, inventory expansion, and customer acquisition that will compound over time. Continue to focus on increasing brand perception by calling out your store’s customer service capabilities, shipping speed, and product quality. 

Non-US merchants should take this time to double down on their most successful markets and audiences outside of the US. Invest in systems and partnerships that can handle both direct international shipping and US domestic fulfillment models.

All businesses should use this market disruption as an opportunity to strengthen customer relationships through transparent communication and superior service.

For US businesses

US merchants who implement aggressive strategies can now capture a substantial market share from international competitors struggling with compliance burdens and degraded customer experiences. Businesses that rely on imports should maintain a high level of transparency on timelines and pricing with their customers to build trust and loyalty.

For non-US businesses

This policy change poses a significant threat to international businesses with a substantial US customer base. They now face a combination of new costs, operational complexity, and risk of customer loss. 

Although competing in the US market will become more challenging, international stores can be ready to respond by implementing rapid strategic adaptation focused on transparency, customer experience, and operational flexibility. Customers that can afford the financial burden of tariffs will continue to buy from brands that align with their values and earn their loyalty.

Regulations may change again in the future, so it’s important to stay informed. Look for updates on national carrier policies, keep tabs on actions taken by your competitors, and help your own team stay aligned on any business or policy changes you make.

Some countries may implement reciprocal tariffs on goods imported from the US. If you manage a US business that ships internationally, this could impact your products’ accessibility for international customers. 

Get further updates, information, and guidance on this developing situation.

Avalara

Auctane (ShipStation and PackLink)