The End of US De Minimis: What's Next?

What makes it so significant?

De minimis has powered the rise of ecommerce in the US, particularly from countries like China where low-cost brands have flooded the market with cheap, mostly, unexpected products. This bill likely spells game-over for those brands who have long relied on US consumers to drive demand for their products and is part of the US’s approach to support more domestic manufacturing and fairer trade.

29 August 2025 was when the de minimis exception ended. Here, we set out what this means for global and UK businesses trading with the US.

What is de minimis?

The de minimis exemption allows many goods valued at or under $800 (per person, per day) to enter the US exempt from duty and import taxes. De minimis is authorised under Section 321(a)(2)(c) of the Tariff Act of 1930, so you may know these imports more often referred to as Section 321 Entries.

This threshold has remained unchanged since 2016, when it was raised from $200 to $800 and has essentially enabled a big boom in overseas imports. It is now under consideration for its potentially negative impact on US domestic industries and possibility for abuse.

Ending the exemption is expected to generate up to $40B in federal revenue over the next decade, although critics to the bill have warned that enforcement costs may offset much of that benefit.

Legislative details to know

The important thing to note is that the repeal targets all countries, extending beyond the May 2025 rollback that had already removed the exception for China and Hong Kong. It applies to commercial shipments only and means personal imports by travellers and bona fide gifts remain exempt.

It took effect on 29 August 2025. This will mean reviewing process and systems to ensure they’re prepared. And crucially compliant. If businesses don’t get this right, there will be fines. Up to $5,000 for a first offence and $10,000 for subsequent violations.

The One Big Beautiful Bill legislated a permanent repeal from 2027, but an executive order brought the suspension forward to 29 August 2025, covering commercial shipments from every country.

Why this matters for customs classification

1. Surge in volume: All parcels, even under $800, will require the appropriate customs documentation, HTS code and duty payment. Classification teams must be prepared to process dramatically higher volumes.
2. Increased compliance risk: Misclassification carries financial penalties. Products that had previously gone unscrutinised will be looked at more closely for the correct tariff code
3. Bottlenecks and delays: Manual processing will struggle under the volume surge. Without automation or a hybrid approach, entries will bottleneck, delaying deliveries and increasing demurrage costs.

Navigating the changes

Customs professionals should evaluate their current systems and processes to identify gaps and necessary improvements. This includes assessing your classification capabilities and processing capacity. Can your team manage with an increase in volume?

Practical steps to take now:

• Audit current volumes: Identify all entry lines under $800 over the past 12 months to model future workload and duty liabilities
• Access audit trails: Document every classification decision, supplier declaration, and valuation method to support post-2027 verifications
• Train your team: Host workshops on Section 321’s repeal ensure your team is tracking updates
•  Automate: Review your current technology’s capability. Automating tariff classification will be key to managing an increased in volume and deeper scrutiny

How to classify products under the new rules

With the exemption gone, every commercial parcel into the US now needs a full customs declaration, the correct tariff code and duty paid at entry. Here is how to keep shipments moving and compliant.

Put an HTS code on every parcel. In the US, tariff codes are Harmonised Tariff Schedule (HTS) codes. Each shipment now needs one, along with value, origin and product details, with duty and import taxes paid at the time of entry.

Prove where goods are made. Extra duties now apply based on country of origin, so a UK company exporting China-made goods may still face Section 301 tariffs. Keep a certificate of origin or supporting evidence such as supplier declarations, manufacturing records and bills of materials. Standard UK-to-US import duty is generally around 10%, before courier handling and clearance fees.

Classify with a specialist system like TTVerified, not guesswork. Relying on general search tools or AI such as ChatGPT to assign codes is a risk. Accurate classification needs a specialist system, backed by experts, that can interpret complex rules and deliver the correct, compliant code with the audit trail to back it up.

Rethink how you sell, if the numbers no longer work. Where shipping and duty now exceed a low item value, consider US-based distributors or switching from direct-to-consumer to wholesale.

TariffTel is built for exactly this. Classify at speed yourself with TTExplore, get expert-backed, audit-ready HTS and commodity codes with TTVerified, or hand high volumes to our Managed Services team to classify and maintain. This is precisely where TTVerified adds value — expert-backed, audit-ready classification at scale.

How technology like TariffTel supports trade with the US

TariffTel’s TTVerified platform is designed for precisely this kind of regulatory upheaval. With:

• Bulk-entry automation: Process thousands of small-parcel entries quickly and compliantly
• Human insight: Smart automation underpinned with a team of specialists who understand all regulatory nuances and complexities
• Comprehensive audit: Store every decision point and classification decision ready for customs inspections or audits. Avoid fines.

Get in touch to find out how you can be prepared.