U.S. Ends Duty-Free $800 Import Rule, Raising Costs for Online Shoppers

A major shift in U.S. trade policy is set to reshape the way Americans shop online. The Trump administration has scrapped the “de minimis” rule, which previously allowed consumers to import goods valued under $800 without paying duties. The change, announced July 30 and effective a month later, is expected to make cross-border e-commerce purchases more expensive.

The move builds on a May decision to apply tariffs on small packages shipped from China and Hong Kong—an effort that already hit ultra-low-cost retailers like Shein and Temu. Now, the new rule applies globally, impacting shipments from all countries unless sellers absorb the additional costs.

Why the U.S. Pulled the Plug

The White House argues the exemption created loopholes that smugglers exploited, particularly for shipping fentanyl into the country. U.S. retailers also pushed for the repeal, claiming the policy gave foreign sellers an unfair edge by letting them bypass import duties that domestic chains like Walmart and Target already pay.

How Big the De Minimis Market Was

The now-defunct exemption powered a boom in cheap international shopping. In fiscal 2024 alone, 1.36 billion packages entered the U.S. duty-free, carrying a declared total value of $64.6 billion. About 73% of those shipments came from China, with Canada, Mexico, and the U.K. following.

Since the China-specific ban took effect in May, incoming shipments under the rule have already dropped by roughly a third, according to logistics firm Red Stag Fulfillment.

International Fallout

Postal services around the globe are scrambling to adjust. Carriers like Australia Post, Royal Mail, DHL, and Korea Post have temporarily paused U.S.-bound shipments to update systems for collecting duties—something many have never had to do.

“This is a big adjustment for postal networks,” said Clint Reid, CEO of Zonos, which helps businesses handle customs duties. “They’re moving from a world of duty-free shipping to one that requires precise data collection and tax compliance.”

Impact on Retailers

Fast-fashion platforms Shein and Temu, both reliant on Chinese supply chains, have already adapted, with prices inching upward. However, analysts suggest these companies may be better positioned than smaller competitors because of their scale and established logistics networks.

“It’s actually become relatively cheaper to ship from China compared to other countries, given rising global freight costs,” said Yao Jin, a supply chain professor at Miami University.

Small Businesses Brace for Higher Costs

The change may hit small businesses hardest. Independent sellers on platforms like Etsy and eBay now face extra paperwork, slower delivery times, and higher costs they’ll likely pass to customers.

Some international brands are already warning buyers. U.K.-based Merchant & Mills, a sewing pattern and fabric company, recently told U.S. customers to expect a 15% price increase to cover tariffs.

What’s Next for U.S. Shoppers

For years, American consumers enjoyed a near-frictionless pipeline of cheap goods from overseas. That era is ending. With more scrutiny at customs and new costs baked into shipping, shoppers should expect higher prices and slower delivery from foreign sellers—especially for low-cost items.