UpcomingTermination of the de minimis exemption, could pose challenges to peak season planning for e-commerce supply chains.

This exemption allows imported goods valued under $800 to enter the U.S. duty-free, but according to theWhite House fact sheet, the policy will be eliminated on August 29 to combat drug trafficking and importers evading tariffs. Previously, the de minimis exemption was scheduled to end onJuly 1, 2027, as part of the tax bill signed by President Donald Trump last month.

Since May, the exemption has beenbanned for imports of Chinese origin, but many importers had planned to continue using the trade tool to import from other countries in the coming years, said Maggie Barnett, CEO of LVK Logistics. Although the de minimis exemption is associated with major direct-to-consumer market platforms like Shein and Temu,a range of other businessesalso use the tool for cost-effective cross-border parcel shipping.

"They are scrambling now because they thought (the elimination) wouldn't come this fast," Barnett said.

The shortened timeline for the trade tool's elimination will make it difficult for direct-to-consumer importers to fully adjust their operations before the Q4 holiday shopping season. However, experts say shippers relying on the de minimis exemption still have ways to mitigate the impact of the exemption's termination in the short and long term.

Pricing and shipping hurdles ahead

Without the de minimis exemption, low-cost imported goods will be subject to all applicable tariffs—includingtariffs imposed by the Donald Trump administration—which brings additional costs they previously could avoid.

Trump's executive ordereliminated the trade tool but provided an exception for a cost-effective import method: the international postal network. However, postal parcels will not be fully exempt. They will be assessed tariffs equivalent to those under the International Emergency Economic Powers Act, or fees of $80 to $200 based on IEEPA rates.

The latter method applies only for six months, and experts say the fee is unaffordable for importers. According to U.S. Customs and Border Protection data for fiscal year 2023, the average value of de minimis shipmentswas about $54。

Passing tariff costs to consumers is a strategymany retailers are considering this year. However, online shoppers accustomed to low prices may consider alternatives, such as physical stores, if faced with additional fees, said Nick Baker, co-head of Kroll's trade and customs practice.

"When customers start seeing tariff costs or customs fees in their shopping cart, it often kills that transaction," Baker said.

Termination of the de minimis exemption will raise import costs for goods destined for the U.S.
Product Country of Origin 2024 Price 2025 Price*
Women's Cotton Comfort Slippers China $30 $45.37
Nutritional Supplements Canada $37 $60.17
Stainless Steel Water Bottle United Kingdom $15 $21.81
Japanese Chef's Knife Japan $240 $298.49

Source: FlavorCloud

*2025 prices include general tariffs, additional tariffs, and fees that will apply to goods under $800 after the de minimis exemption is eliminated on August 29. The exemption has been banned for imports of Chinese origin.

In addition to pricing pressures, shipping delays may also arise as Customs and Border Protection will process a wave of goods previously benefiting from the de minimis exemption through more rigorous entry procedures, said Anthony Pisa, vice president of marketing at freight forwarder Accelerated Global Solutions. Especially smaller shippers may struggle to comply withformal entryrequirements, which require detailed commercial invoices, customs bonds, and more.

"Major retailers and all our clients will be prepared for peak season," Pisa said, but he added that unprepared businesses will face "hassles and hiccups."

Bulk shipping means bigger inventory bets

To understand the impact of tariffs on de minimis shipments, shippers should identify whichSKUsutilized the de minimis exemption and run cost simulations that include applicable tariffs and fees, according to Stord. The fulfillment service provider says businesses should also simulate the cost of importing large quantities at once (rather than individual direct-to-consumer shipments) to determine the most cost-effective fulfillment strategy.

Experts say that for many e-commerce brands, bulk importing into domestic warehouses may be more efficient than individual shipments. This shift couldboost container importswhilecurbing air freight activity。

"Now you need a wholesale strategy to bring these goods in and hold them in the U.S.," said Ratna Sharad, CEO and founder of cross-border shipping platform FlavorCloud.

But bulk importing will bring new inventory planning considerations to brands previously centered on the de minimis exemption, as they must ensure that large quantities of imported goods are attractive enough to sell quickly and avoid clogging warehouses. Baker noted that companies may use promotions to incentivize consumers to buy goods already in U.S. inventory.

Barnett of LVK Logistics said some importers with inventory backlogs in cross-border warehouses in Canada and Mexico are limiting the frequency of their U.S.-bound shipments. This allows them to consolidate more orders into a single customs crossing, thereby limiting costs associated with customs clearance. But the trade-off is potentially slower fulfillment speeds for consumers, so many shippers are considering U.S.-based fulfillment options after the peak season rush, she said.

"Everyone is doing this to get through peak season and the end of the year, while starting to plan their new business models," Barnett said. "That will typically involve third-party logistics in the U.S., because they ultimately have to pay the tariffs."