The De Minimis Dilemma: What U.S. Policy Changes Mean for Global E-Commerce

For years, the U.S. de minimis rule made cross-border shipping almost frictionless. Under this $800 exemption, low-value packages entered the country without duties, taxes, or extensive customs scrutiny. Platforms like Shein, Temu, and AliExpress leaned heavily on this foundation, shipping millions of individual packages directly from overseas warehouses to American consumers at low prices.

Then everything changed. On August 29, 2025, the U.S. eliminated the de minimis exemption, subjecting every shipment—regardless of value—to customs clearance. The shift affects roughly 3–4 million packages daily and fundamentally reshapes the economics of global e-commerce logistics.

This policy change creates enormous challenges for merchants, but consolidation strategies, multi-carrier orchestration, and platforms like Carriyo can help businesses adapt and even thrive in this new environment.

What Is the De Minimis Rule?

The de minimis rule, codified in Section 321 of the Tariff Act of 1930, allows imported goods below a specified value threshold to enter the U.S. duty-free with minimal customs processing. The term comes from the Latin phrase meaning "of little importance"—originally designed to avoid administrative expenses that would be disproportionate to potential revenue.

The threshold has evolved dramatically since its 1938 introduction at just $1. It jumped to $200 in 1993, then surged to $800 in 2016 under the Trade Facilitation and Trade Enforcement Act. This 2016 increase created one of the world's highest de minimis thresholds and unlocked unprecedented growth in direct-to-consumer international shipping.

The rule’s impact was transformative for global trade. Shipments valued under $800 bypassed formal customs declarations, avoided all duties and taxes, and received expedited processing. This created a frictionless pathway that eliminated the traditional complexity and expense of cross-border commerce.

Chinese e-commerce platforms mastered this system. Shein priced most orders well below $800, avoiding import duties that applied to traditional retailers. The results were staggering—de minimis shipments grew from 139 million in 2015 to 1.36 billion in fiscal year 2024, representing a nearly 10x increase in volume and making affordable direct-to-consumer global trade a reality for millions.

The Policy Change: End of De Minimis

Executive Order 14324, signed July 30, 2025, eliminated the de minimis exemption globally, effective 12:01 a.m. EDT on August 29, 2025. This followed an earlier May 2, 2025 elimination specifically targeting China and Hong Kong, creating a two-phase rollout that gave businesses limited adjustment time.

The scale is unprecedented. With around 3–4 million packages entering the U.S. daily under de minimis—totaling 1.36 billion annually in 2024— this policy change suddenly subjected the vast majority of small packages to duties, taxes, and formal customs processing. Every package now requires proper documentation, HTS classification codes, and often customs broker involvement.

The government’s rationale centered on closing loopholes:

• National security concerns: officials cited the use of de minimis shipments for illicit goods, including narcotics
• Counterfeit goods: IP rights enforcement agencies highlighted a surge in counterfeits arriving under de minimis
• Unfair competition: Chinese platforms benefited disproportionately from direct-shipping models
• Revenue protection: CBP argued that the exemption reduced compliance with customs law and undermined duty collection

Congressional support solidified through the One Big Beautiful Bill Act, signed July 4, 2025, which repeals the statutory basis for de minimis effective July 1, 2027—though Trump’s executive action accelerated implementation by nearly two years.

The Impact on Merchants

Rising Costs

The immediate financial impact on merchants is severe. Direct tariff exposure now hits every shipment, with standard U.S. tariff rates applying across categories. For lower-value consumer goods, this often translates to double-digit percentage increases in landed costs.

Small-ticket items once priced attractively can now be uneconomical. An inexpensive pair of accessories that previously entered duty-free may now cost significantly more after duties, taxes, and customs fees—reshaping consumer purchase behavior.

Delivery Delays

Customs bottlenecks are causing serious delivery slowdowns. CBP acknowledged the processing surge and prepared staffing increases, but clearing millions of additional shipments daily strains resources. Earlier in 2025, when de minimis was suspended for China and Hong Kong, U.S. ports saw backlogs within days—previewing the nationwide strain now being felt.

Administrative Complexity

Every shipment now requires detailed documentation, proper HTS classification, and often customs broker involvement. For merchants handling thousands of entries monthly, this creates overwhelming paperwork and compliance burdens. Errors can result in penalties, seizures, or delayed shipments that damage customer relationships.

SMBs vs. Giants

Large enterprises can leverage existing customs broker relationships, negotiate with suppliers, and invest in compliance technology. Small and medium businesses, however, face existential challenges. As Brian Bourke from SEKO Logistics noted: “Larger companies may have the resources to adapt by rerouting logistics or investing in compliance. Smaller businesses often do not.”

The Customer Experience Effect

Higher Prices

Consumers are seeing immediate price increases. Economists, including Federal Reserve analysts, have noted that tariff-related costs are passed through to consumer prices quickly—within months. Analysts expect 10–20% price rises in many product categories, with consumers responding by trading down or cutting discretionary spending.

Slower Deliveries

Transit times have extended from days to weeks in many cases. Customs processing that was previously instantaneous now adds unpredictable delays. While speed historically drove satisfaction, reliability has become the new priority—yet it’s precisely reliability that’s hardest to guarantee.

Trust Issues

Merchants face more failed deliveries and confusion around unexpected fees. Industry surveys show many consumers abandon carts when shipping estimates seem too long or unclear, and transparency about duties and taxes is now a trust differentiator. Without clear communication, customers may avoid cross-border purchases altogether.

Consolidated Shipping as a Solution

Consolidated shipping has emerged as the primary strategic response to de minimis elimination, offering merchants a pathway to restore cost efficiency and operational control.

Definition

Consolidated shipping groups multiple shipments into one consolidated entry rather than processing each package individually through customs. The model is straightforward: collect packages destined for the same region, consolidate into a master consignment, clear customs once, then deconsolidate for final domestic delivery.

Benefits

• Cost efficiency: Fewer customs entries lower brokerage costs and admin overhead
• Faster processing: Consolidated entries often clear in hours, versus days for individual packages
• Simplified compliance: Fewer documentation errors across batches
• Predictable timelines: Merchants can set more accurate delivery expectations

Case Example: FedEx International Priority DirectDistribution (IPD)

FedEx IPD exemplifies consolidation in action. Available to 65+ countries with 1–4 business day delivery, the service enables EU Single Point of Clearance through Paris CDG or Cologne.

Customer results include:

• Agilent Technologies reducing pipeline inventory by $5 million
• LaFrance Corporation lowering logistics costs by 15%
• Lug increasing daily shipment capacity tenfold

UPS Trade Direct and DHL also provide comparable consolidation solutions with global reach.

Carriyo's Role in Navigating the New World

The complexity of post-de minimis logistics demands sophisticated technology. Carriyo helps merchants adapt with:

• Multi-carrier orchestration: 100+ carrier integrations to optimize cost and service
• Standardized statuses: Unified updates across carriers to simplify customer communication
• Proactive automation: Branded notifications triggered at key shipment milestones
• Scalability: Rapid onboarding of new carriers or consolidation providers without long IT projects

Case studies like MH Alshaya demonstrate measurable results: after implementing Carriyo, the group achieved an 80% reduction in customer complaints and improved all delivery KPIs.

Looking Ahead: The Future of Cross-Border E-Commerce

Other Regions

The U.S. isn’t alone in reconsidering de minimis thresholds. The EU is discussing lowering its €150 threshold, and countries like Canada and Australia are also reviewing their exemptions. A global tightening trend appears likely.

Consumer Trends

Consumers increasingly value transparency and reliability over rock-bottom pricing. Gen Z and Millennials, who make up a large share of cross-border shoppers, are already moderating their purchases in light of higher costs and delays.

Winners

Merchants who thrive will share traits:

• Adaptability: quick adoption of consolidation and new supply chain models
• Technology investment: platforms that automate compliance and communication
• Transparency: clear expectations around cost and delivery
• Carrier flexibility: ability to reroute and optimize in real-time

Conclusion: Turning Complexity Into Opportunity

The end of de minimis reshapes global shipping in ways we’re only beginning to understand. Complexity rises—more paperwork, higher costs, longer transit times, and frustrated customers. But so do opportunities for merchants who adapt.

The winners won’t be those who simply absorb costs. They’ll be merchants who embrace consolidation, implement multi-carrier strategies, automate compliance, and communicate transparently.

Platforms like Carriyo make this transformation achievable for businesses of all sizes. By simplifying multi-carrier operations, standardizing communication, and enabling smarter shipping decisions, Carriyo turns regulatory challenges into competitive advantages.

Ready to navigate the new world of cross-border e-commerce? Contact our sales team today or book a demo to see how Carriyo can optimize your international shipping operations.