The landscape of international commerce has shifted dramatically. Last week, the United States eliminated the de minimis exemption — a trade rule that allowed packages valued at $800 or less to enter the country duty-free with minimal customs processing.
This change affects millions of small businesses and e-commerce operations that rely on international suppliers or serve international customers. Understanding these new regulations and adapting quickly will determine which businesses thrive and which struggle in this new environment.
The De Minimis Rule Has Officially Ended
President Trump’s executive order suspending the de minimis rule took effect on Aug. 29, 2025, ending a policy that dates back to the Tariff Act of 1930. The rule originally allowed small-value imports to avoid tariffs and extensive customs processing to reduce administrative burden on both businesses and customs officials.
The threshold had increased significantly over time — from $1 in 1938 to $800 in 2016 — making it one of the most generous exemptions globally. In 2024 alone, U.S. Customs and Border Protection processed over 1.36 billion de minimis packages, representing 92% of all import entries by volume.
All products entering the United States are now subject to duties and tariffs based on their country of origin, regardless of value. Current tariff rates vary widely, ranging from 10% for the United Kingdom to 50% for countries like Brazil and India.
How Small Businesses Are Being Impacted
The elimination creates immediate financial and operational challenges for small businesses. Companies that previously imported goods under the $800 threshold now face tariffs ranging from 10% to 50%, depending on the product category and country of origin.
Apparel faces particularly steep increases, with average tariff rates of 23.8%. Chinese imports can incur total tariffs up to 145%. Beyond government tariffs, businesses must also account for new brokerage and handling fees from carriers and customs brokers, which typically add $10-$20 per parcel.
Many international postal and shipping services have suspended delivery services to the United States while they develop systems to handle the new paperwork requirements and collect duties and taxes. Switzerland’s Swiss Post, DHL, Britain’s Royal Mail, and postal services from Japan and India have all announced temporary suspensions of U.S.-bound shipments.
Strategic Adaptation for Small Businesses
Small businesses can implement several strategies to navigate these changes effectively. Price adjustment represents the most direct approach, but requires careful market analysis to maintain competitive positioning while covering increased costs.
Exploring alternative shipping methods and consolidating orders can help reduce per-unit tariff costs. Some businesses are shifting to larger, less frequent orders to achieve better economies of scale, though this requires more working capital and inventory management.
Businesses should prepare for increased paperwork requirements. Every formerly duty-free shipment now requires formal customs entries, including HS codes, commercial invoices with precise declared values, and formal entry documentation. Investing in customs broker relationships or trade compliance software can streamline these processes.
Domestic sourcing presents another adaptation strategy. Companies can reduce exposure to tariffs by identifying U.S.-based suppliers or nearshoring to countries with favorable trade agreements. While this may initially increase costs, it provides greater supply chain control and predictability.
For businesses serving international customers, transparent pricing becomes critical. Companies like Korean cosmetics brand Olive Young have begun displaying duties and taxes at checkout to eliminate surprise charges upon delivery, creating a “seamless shopping experience” despite higher total costs.
Preparing for the New Trade Environment
The end of the de minimis exemption represents a fundamental shift in international trade policy. Small businesses that act quickly to understand and adapt to these changes will be better positioned for long-term success.
Businesses should conduct immediate assessments of their supply chains, calculate the impact of new tariffs on their cost structures, and develop pricing strategies that maintain competitiveness while covering increased expenses. Establishing relationships with customs brokers and investing in trade compliance systems will become increasingly valuable as import procedures become more complex.
The elimination of de minimis creates challenges, but it also levels the playing field by subjecting all imports to the same regulatory framework. Small businesses that master these new requirements may find competitive advantages over those that fail to adapt quickly to the changing trade environment.
