The End of De Minimis: Why Your American Parcel May Never Arrive Overseas

By Ephraim Agbo 

On August 29, 2025, the United States will end the de minimis exemption that has, for years, allowed parcels worth less than $800 to enter duty-free. The change is abrupt, wide-ranging and already prompting postal operators across Europe, Asia and Australia to pause shipments to the U.S. as they scramble to understand new customs rules. For the 1.3–1.4 billion small parcels that entered the U.S. under this rule annually, this is not a tweak — it’s a tectonic shift.

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What the change actually is

• Before: Any shipment valued under $800 (per person, per day) entered the U.S. duty-free under Section 321 (de minimis).
• After (from Aug 29, 2025): That duty-free treatment ends. Every product — regardless of category, value, or origin — will be assessed duties ranging between 15% and 70%.

In 2023 alone, more than 1.4 billion parcels qualified for the exemption. That equals almost 4 million parcels per day. Nearly 50% of these shipments were textiles and apparel.

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Why this is happening

• U.S. officials say the rule was abused, letting hundreds of millions of low-value goods (often from Chinese platforms) enter tariff-free.
• Domestic industries argue this depressed local production. Textile factories, for instance, are currently running at only 50–75% capacity.
• Industry groups like the National Council of Textile Organizations estimate closing the loophole could redirect billions of dollars in orders toward U.S. and Western Hemisphere suppliers.

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The immediate shock: postal suspensions

Because the deadline is just days away, many national carriers have suspended U.S.-bound shipments.

• Royal Mail (UK) has paused new parcel consignments to the U.S.
• DHL’s postal division (Germany) has introduced restrictions.
• PostNord (Nordic countries) has also frozen services.
• Similar suspensions are emerging across Europe, Asia, and Australia.

For businesses, this means shipments stuck in transit, rejected packages, and upset customers.

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The impact in a glance

• $800 → $0: The duty-free threshold is gone.
• 15% to 70%: New range of import duties that will now apply.
• 1.3–1.4 billion: Estimated number of parcels that used de minimis in 2023.
• 50%: Share of these shipments that were textiles and apparel.
• 80–90%: Sales exposure many small exporters have to the U.S. market.
• 30–40%: Proportion of one Australian jeweller’s revenue lost overnight because she halted U.S. shipments.

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Winners and losers

Winners:

• U.S. manufacturers, particularly textiles and apparel firms, who will see reduced competition from ultra-cheap imports.
• Nearshore suppliers in Mexico, Central America, and the Caribbean, who benefit from trade deals like USMCA and CAFTA.

Losers:

• Small exporters overseas: Many depend on the U.S. for 70–90% of sales. Without systems to collect duties, they face immediate shutdown.
• Consumers: Expect higher costs, slower deliveries, and fewer options. For a $20 shirt, a 15–30% tariff could add $3–$6 — wiping out the value proposition.
• Postal operators: Must rebuild customs systems to handle millions of extra filings daily.

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Real-world business scenarios

1. The Micro-Jeweller in Australia

   • 30–40% of revenue comes from U.S. buyers. With no system to remit tariffs, many have stopped shipping altogether. Risk: returns, chargebacks, and reputation loss.

2. Apparel Seller in Southeast Asia

   • Apparel was nearly 50% of all de minimis packages. With courier costs rising and postal services suspended, margins collapse.

3. The American Discount Shopper

   • A $25 gadget from overseas now attracts a 15–70% tariff. Add shipping delays and handling fees, and the final cost could double.

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What small exporters should do now

1. Audit your U.S. exposure — If 80–90% of your sales come from the U.S., urgent action is required.
2. Update checkout systems — Offer Delivered Duty Paid (DDP) so customers see full costs upfront.
3. Negotiate with couriers — Express operators like FedEx and UPS can still deliver, but rates will be higher.
4. Explore fulfillment partners — Warehousing stock in the U.S. bypasses per-parcel customs.
5. Adjust product mix — Stop shipping ultra-low-value items. Focus on goods where a 15–20% tariff won’t kill margins.
6. Be transparent with buyers — Tell them duties are coming. Surprises will destroy trust.

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The bigger picture

• 1.4 billion shipments → now taxable.
• Millions of small businesses worldwide at risk.
• U.S. factories running at 50–75% capacity may finally see a bump.
• Consumers face higher costs on everyday low-value imports.

This is not just a customs tweak. It’s a restructuring of global e-commerce supply chains. Winners will be domestic U.S. producers and nearshore partners. Losers will be small overseas sellers who cannot pivot quickly.

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Final Thought

The end of de minimis is a $100-billion-dollar reset of how goods move into the U.S. The world’s biggest consumer market has raised its walls. For small exporters, survival will depend on speed, adaptation, and creativity. For U.S. producers, this could be the long-awaited chance to reclaim market share.

Either way, August 29, 2025, will go down as the day global e-commerce changed forever.