De minimis explained: how the US closed its duty-free parcel lane

“De minimis” comes from a Latin legal phrase about the law ignoring trifles. In customs, it is a value below which collecting duty costs more than it raises. For most of the past decade, the United States had one of the most generous such limits in the world. In 2025 it removed it.

What the rule was

The US exemption sits in Section 321 of the Tariff Act of 1930, codified at 19 U.S.C. § 1321. It allowed customs officials to admit goods free of duty and import taxes when the total retail value imported by one person on one day did not exceed a set amount. The statute says the purpose was to avoid costs to the government “disproportionate to the amount of revenue” at stake [1].

That amount rose slowly for decades, from $1 in the original 1938 provision to $200 in 1993. In February 2016, the Trade Facilitation and Trade Enforcement Act raised it to $800 [1]. The law also barred splitting a single order into several parcels to stay under the limit [1].

Why it grew

The $800 limit arrived just as online marketplaces began shipping single items straight from factories to consumers. U.S. Customs and Border Protection (CBP) counts these entries by bill of lading, the carrier’s shipping document. It recorded 636.7 million de minimis shipments in fiscal 2020 and 1.36 billion in fiscal 2024, with a declared value of $64.6 billion in the latter year [2]. CBP says it was screening nearly 4 million low-value shipments a day [2].

Platforms such as Shein and Temu built business models around this lane: goods sent by air from China, one parcel per order, with no duty owed. When duty-free entry ended for China, Temu told Reuters that US sales would be handled by locally based sellers fulfilling orders from inside the country [3].

Economists Pablo Fajgelbaum of UCLA and Amit Khandelwal of Yale studied carrier and CBP data and found that lower-income US zip codes were more likely to import de minimis parcels, particularly from China [4].

How the United States ended it

The change came in stages.

• China and Hong Kong, 2 May 2025. An executive order of 2 April 2025 (EO 14256) ended duty-free treatment for low-value goods from China and Hong Kong. CBP confirms it took effect on 2 May [5][6]. An earlier attempt, in an order of 1 February 2025, had been paused four days later [6].
• Permanent repeal in law, 4 July 2025. The budget law signed that day (Public Law 119-21) strikes the $800 provision from the statute, effective 1 July 2027 [1].
• All countries, 29 August 2025. Executive Order 14324, signed on 30 July 2025, suspended de minimis for goods from every country from 29 August [6]. It cited the emergency over fentanyl and other illicit drugs, and said risks of evasion and drug smuggling were “particularly high” for low-value parcels [6]. For postal items, carriers could choose a duty based on value or, for six months, a flat charge of $80, $160 or $200 per item depending on the origin country’s tariff rate [6].

The legal basis then shifted. On 20 February 2026, the Supreme Court held that the International Emergency Economic Powers Act (IEEPA), the law used for many 2025 tariffs, does not authorize tariffs [7]. The same day, the president signed Executive Order 14388, which kept the de minimis suspension in place from 24 February 2026 and tied postal duties to a new temporary import surcharge [8]. In June 2026, CBP issued a rule suspending de minimis indefinitely for mail and creating a new electronic postal entry process, effective 24 July 2026 [9]. CBP has since moved the mandatory start of that process to 20 January 2027 [10].

Ending de minimis did not just add a tax. It moved the job of collecting duty from the border to the post office of the sending country.

What happened next

Postal networks were the first to feel it. For the first time, the US required carriers or CBP-approved third parties to collect duty before a parcel arrived. Airlines and postal operators were not ready to take that on. According to the Universal Postal Union (UPU), the UN agency for postal services, traffic to the US on 29 August 2025 was 81% lower than a week earlier, and 88 postal operators told the UPU they had suspended some or all services to the country [11]. The UPU’s list spans rich and developing economies alike, from Germany, Japan and the United Kingdom to Mexico, Egypt, South Africa and Thailand [12]. The UPU began offering posts a tool to calculate and collect duties at the point of sale from 5 September 2025 [11].

Revenue started to flow. CBP said on 17 December 2025 that it had collected more than $1 billion in duties on over 246 million low-value shipments since May, and that seizures of unsafe or non-compliant goods had risen 82% since the China change [5]. CBP’s fiscal 2025 total for de minimis entries, a year that ended in September and includes months before the change, fell to 942.5 million, from 1.36 billion a year earlier [2].

Some sellers left. Reuters reported in May 2025 that several smaller retailers had stopped shipping to US customers, citing costs [3].

How other places handle low-value imports

The European Union has let goods under €150 enter without customs duty, although VAT applies. On 11 February 2026, EU governments formally abolished that relief [13]. Full tariffs will apply once a planned EU customs data hub is running, expected in 2028. Until then, a flat €3 duty applies to each category of item in a small parcel, from 1 July 2026 to 1 July 2028 [13]. A parcel with a silk blouse and two wool blouses therefore owes €6. The Council cites European Commission figures: 4.6 billion small parcels entered the EU in 2024, 91% of them from China [13].

The United Kingdom allows goods worth £135 or less in without customs duty, though VAT has been collected on them since 2021. At its Autumn Budget 2025, the government announced it would remove the relief by March 2029 at the latest, and it published its consultation response on 13 July 2026 [14].

The arguments

Supporters say the exemption cost revenue and hid risk. CBP Commissioner Rodney Scott said the speed of the $1 billion figure showed “how much revenue was slipping away” [15]. The White House framed it as a drug-control measure [6]. In Europe, Cyprus finance minister Makis Keravnos called the threshold out of date and said removing it would help EU businesses and stop dishonest sellers [16]. The common thread is fairness: a domestic shop pays duty on bulk imports, while a foreign seller shipping parcel by parcel did not.

Critics point to who pays. Fajgelbaum and Khandelwal estimated that eliminating Section 321 would reduce US economic welfare by $10.9 billion to $13.0 billion, with losses falling hardest on lower-income and minority consumers [4]. The UPU warned that sudden rule changes can make basic international post less accessible and affordable, and can hurt postal trade involving developing countries [12].

What to watch

• 20 January 2027: CBP’s new electronic entry process becomes mandatory for postal shipments subject to certain US duties [10].
• 1 July 2027: the statutory repeal of the $800 exemption takes effect, making the change permanent in law rather than by executive order [1].
• CBP’s October 2026 proposal: a proposed rule on low-value shipments would extend the new data requirements to almost all international mail parcels [10].
• 2028: the EU’s €3 interim duty is due to give way to full tariffs once the customs data hub is running [13].
• By March 2029: the UK’s £135 relief ends [14].