De minimis exemptions are ending: Is your business ready?

This post has been updated to reflect new developments. Attend our webinar series, Trade and Tariff Tuesdays, to hear Avalara experts discuss global trade issues and their business implications.

The United States suspended the de minimis exemption for China and Hong Kong on May 2, 2025, and for all other countries as of August 29, 2025. President Donald J. Trump continued the suspension on February 20, 2026. Several other countries are also working to eliminate duty-free status for low-value parcels. 

Key takeaways

• As of August 29, 2025, low-value goods (less than $800) entering the U.S. from all locations are subject to applicable U.S. duties. Low-value international postal shipments are subject to applicable tariffs or to a flat duty ranging from $80 to $200 per item, depending on the country of origin.
• With the de minimis suspension, all imports must include the 10-digit Harmonized Tariff Schedule of the United States (HTSUS) codes when filed electronically through the Automated Commercial Environment (ACE). Assigning the correct HTSUS codes helps ensure accurate tariff application.
• American travelers may bring back up to $200 worth of personal items duty free, and individuals can receive bona fide gifts valued up to $100 duty free.
• The EU and U.K. are among the countries working to end their duty-free de minimis policies.

Read on for more information or jump to the sections that interest you most:

• What is the de minimis exemption for customs duties?
• Trump ends de minimis
• New entry process for low-value goods
• Postal operators suspend shipments to U.S.
• Impact on businesses
• Why are countries eliminating de minimis?
• De minimis FAQ

The U.S. de minimis trade policy allowed many goods valued at or under $800 (per person, per day) to enter the country exempt from duty and import taxes. De minimis is authorized under Section 321(a)(2)(c) of the Tariff Act of 1930, so these imports are often called Section 321 Entries.

Roughly 100 countries/territories have de minimis thresholds, but the U.S. threshold was among the most generous. Congress raised the de minimis threshold from $200 to $800 (per person per day) in March 2016. The $800 value was based on the aggregate fair retail value in the country of shipment.

On February 1, 2025, President Donald J. Trump issued three separate executive orders eliminating the de minimis exemption for Canada, Mexico, and the People’s Republic of China effective February 4. 

Trump ended up pausing the elimination of de minimis for Canada and Mexico to allow time for negotiations. He issued new executive orders on March 2 that maintained the de minimis exemptions for Canada and Mexico until “adequate systems are in place to fully and expeditiously process and collect tariff revenue” on de minimis shipments. 

The president allowed the de minimis exemption to cease for China on February 4, but he paused the tariffs on de minimis shipments from China on February 5 because United States Customs and Border Protection (CBP) needed time to prepare to process and collect tariffs expediently. Products of China and Hong Kong ceased to be eligible for de minimis on May 2, 2025.

The One Big Beautiful Bill Act of 2025 ended de minimis for all commercial shipments effective July 1, 2027. Yet some people close to the Trump administration hinted that de minimis would be eliminated much sooner than 2027 — and the rumors proved true.

The U.S. suspended duty-free de minimis treatment for low-value shipments entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. ET on August 29, 2025. That didn’t give businesses much time to prepare to apply the proper rate of duty to all low-value imports. And tariff rates vary considerably by country and product. 

For non-postal shipments eligible for the de minimis exemption prior to the Executive Order of July 30, 2025, a qualified party must file the appropriate entry type in the Automated Commercial Environment (ACE) starting August 29, 2025. All imports filed through ACE must be assigned the correct 10-digit Harmonized Tariff Schedule (HTS) code.

HTS codes identify products that move across international borders. They’re sometimes called tariff codes because they drive tariff rates. It’s essential to apply the proper code to all imports because assigning the wrong HTS code can result in an incorrect rate of duty.

“10-digit HTS codes are already required for a majority of clearance processes,” explains Shane Bogdan, Director of Cross-Border Sales at Avalara, “but not everyone is providing them, nor are they being classified accurately. In some instances, organizations may be just affixing four random digits (e.g., 0000) to the end of a 6-digit HS code to make it the required 10-digit code.”

Paper entry forms or documents are no longer accepted for low-value imports, and affected products can’t be entered using Entry Type 86, or T86 (a customs entry type created for low-value imports).

Acceptable entry types include Entry Type 11 (informal) and Entry Type 01 (formal).

Entry Type 11

For Entry Type 11, the importer of record must submit a properly completed CBP Form 3461 through the ACE. Required information includes the importer and entry information, shipment and transport details, the transaction value, and the 10-digit HTS code for each imported item.

Entry Type 01

The formal Entry Type 01 is required for commercial shipments with a value greater than $2,500, as well as for products subject to additional duties, quotas, or regulations. Entry Type 01 is typically filed by a licensed customs broker filing both Form 3461 and Form 7501 or only Form 7501. It also requires the 10-digit HTS code for each imported item.

Entry Type 01 must be covered by a bond ensuring payment of applicable duties, fines, penalties, and taxes.

There’s a different entry process for international mail shipments.

New duty rates for international postal shipments

From August 29, 2025, to February 28, 2026, there were two customs options for international postal shipments. Transportation carriers could select either option but needed to apply the same methodology to all postal shipments during a given period. Importers could change the methodology once per calendar month (or on another schedule determined by CBP) so long as they notified CBP at least 24 hours in advance.

1. Ad valorem duty methodology. Apply the duty imposed on the country of origin under the International Emergency Economic Powers Act (IEEPA). The tariff must be assessed on the value of each dutiable postal item (package).
2. Specific duty methodology. Apply a specific duty based on the IEEPA tariff for the country of origin as follows:
   • $80 per item for countries with an effective IEEPA tariff of less than 16%
   • $160 per item for countries with an effective IEEPA tariff of16%–25% (inclusive)
   • $200 for countries with an effective IEEPA tariff above 25%

The specific duty methodology option was available for six months. From February 28, 2026, forward, only the ad valorem duty methodology may be used for international postal shipments. See the CBP ecommerce FAQ and this Knowledge Article for additional guidance.

At least 88 postal operators suspended certain parcel shipments to the U.S. in response to the de minimis exemption suspension. According to the Universal Postal Union (UPU), a specialized agency of the United Nations, the short implementation timeline posed “a significant challenge for the international postal network, particularly for the delivery of ecommerce items.”

To help facilitate duty collection and remittance across the UPU network, UPU worked with relevant postal stakeholders to accelerate the development of a scalable delivered duty paid solution. Avalara was selected to join the UPU Consultative Committee (CC) to support regulatory modernization, develop best practices for data exchange and digital customs clearance, and advocate for inclusive, tech-forward solutions.  

“We are honored to join the UPU Consultative Committee and contribute to shaping a more connected and compliant global trade environment,” said Craig Reed, GM of Cross-Border at Avalara. “Avalara’s mission of simplifying the complexities of cross-border compliance aligns closely with the UPU’s efforts to modernize postal infrastructure, streamline customs processes, and foster innovation. Together, we can unlock global growth opportunities for businesses and improve the delivery experience for consumers worldwide.”

Most postal carriers have resumed shipments to the U.S. Some, like Australia Post, now impose a 10% global import surcharge on all items shipped to the U.S. irrespective of the country of origin. This is due to the U.S. Supreme Court’s invalidation of country-specific tariffs established under the IEEPA (February 20, 2026), and the fact that the U.S. placed a 10% tariff on imports from all countries effective February 24, 2026.

Companies that ship low-value goods into the U.S. may want to alert consumers of potential delays and increased costs, and plan accordingly. Ecommerce businesses should do all they can to streamline cross-border sales. Assigning the correct 10-digit HTS code to all low-value imports can help, as can confirming all imports comply with current trade restrictions. 

“Accurate and complete HTS codes ensure streamlined processing through customs, increase trade visibility and efficiency, and help maintain the integrity of the supply chain,” says Bogdan. Given the heightened focus on compliance, international sellers that proactively adopt cross-border compliance solutions should be in the best position to avoid being held up at customs.

Avalara has a portfolio of solutions to help businesses comply with de minimis exemption requirements and trade restrictions. These include our HS code classification services: Avalara Automated Tariff Code Classification, Avalara Self-Serve Tariff Code Classification, and Avalara Managed Tariff Code Classification. Schedule a call today for more details.

Avalara Tax Research can help your business find clear, concise answers to complex cross-border tax questions, including new duties on low-value imports. Learn about Avalara Tax Research and start a free 30-day trial.

The U.S. received more than 1.36 billion de minimis shipments in 2024, overwhelming customs officials. Furthermore, while most low-value imports were legitimate, “bad actors” exploited the expedited import process to smuggle illegal and harmful goods into the country. In theory, suspending de minimis could stem the flow of illegal low-value imports into the U.S.

Other countries have also seen low-value shipments spike. After the U.S. ended de minimis for China in May 2025, China shifted its focus to the rest of the world.​ Roughly 5.9 billion low-value direct-to-consumer shipments entered the EU in 2025, with over 90% originating from China. 

“The growing volume of trade and complex compliance requirements have made the monitoring of these parcels even more challenging,” notes the European Commission. “This large influx of packages is accompanied by an increase in risks. Many products purchased online from outside the EU do not meet EU standards, raising safety and security concerns for consumers.” For these reasons, the EU is working to end de minimis.

Meanwhile, starting July 1, 2026, EU member states will introduce an interim €3 customs duty on items contained in small parcels valued at less than €150 shipped directly to consumers in the EU. A separate handling fee for small parcels will come into effect no later than November 1, 2026.

The United Kingdom is also looking to remove its customs duty relief for imports with a value of £135 or less.

What is the new de minimis rule?

The United States has ended the de minimis exemption for all countries. Effective August 29, 2025, products valued $800 or less are subject to applicable duties no matter the country of origin. De minimis ended for China and Hong Kong on May 2, 2025.

Is the $800 de minimis rule still in effect?

No. The U.S. eliminated the de minimis exemption for products originating in China and Hong Kong on May 2, 2025, and for all other countries on August 29, 2025.

How will ending de minimis affect businesses that import low-value goods? 

Businesses need to comply with new customs requirements and apply the proper rate of duty to imported goods valued at $800 or less.  

What does the end of the de minimis exemption mean for consumers buying goods from overseas?

U.S. consumers may pay more for international purchases because tariffs will apply to items that previously qualified for duty-free status. 

Are other countries eliminating de minimis exemptions for duties?

Yes. The EU and U.K. are among the countries working to end their exemption for low-value imports.

This post was first published on November 6, 2024.