Life After De Minimis: How Ecommerce Can Adapt to the End of Duty-Free Imports
Aquila non capit muscās. Eagles don't catch flies.
A fly isn't worth the eagle's effort. The energy it would take to catch one is worth more than the meal.
The maxim is a legal precedent going back to the Middle Ages, represented by another Latin phrase: de minimis non curat lex, or "the law does not concern itself with trifles." Courts use it to set aside violations too small to be worth pursuing.
In the U.S., de minimis found a very specific home in import law. For nearly a century, it let businesses bring in goods below a certain value without paying duties on them, since collecting those duties would have cost the government more than they brought in.
But after a decade of exploitation, it's over: the U.S. is moving to permanently reinstate duties on goods of all values. Ecommerce businesses absorbed the new cost overnight last August, and many have been reluctant to make permanent changes without knowing what the future holds. Now, it's safe to say that duty-free importing is gone for good.
If you're an ecommerce operator trying to figure out what this means for your business, here's what we'll cover:
- The history of de minimis and duty-free importation in the U.S., and why import law used it in the first place.
- The changes in ecommerce that turned de minimis from a sound policy into an exploitable loophole in the eyes of policymakers.
- The steps your ecommerce business should take to adapt.
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How de minimis went from sound philosophy to problematic policy
According to research from the Michigan Law Review, de minimis as a legal philosophy traces back to 16th-century English common law, where jurists like Sir Edward Coke shaped it. It appeared in American legal references by 1824 and became a standard across civil and labor law, but for more than a century it remained a principle rather than a statute.
That changed in 1938. Prompted by the FDR administration, Congress amended the Smoot-Hawley Act to add Section 321, which ensured the government didn't spend more money collecting duties on imports than the duties themselves were worth. The original threshold was $1.
Over the next eight decades, Section 321 shifted from a tool for government efficiency to a protection that boosted trade. Its threshold rose from $1 to $5, then to $200 in 1993, and finally to $800 in 2016. The last increase is when things started getting out of control.
Researchers in the Yale Department of Economics found that U.S. de minimis imports skyrocketed from approximately $50 million in 2012 to $64.6 billion by 2024, across more than 1.3 billion individual shipments. Most of that growth came from direct-to-consumer sales on platforms such as Temu and Shein.
In 2025, an executive order ended duty-free de minimis treatment for goods from China and Hong Kong, citing concerns around illicit narcotics, consumer product safety, and tariff evasion. In August 2025, t he suspension was expanded to all countries. The Court of International Trade upheld the suspension in August 2026, and the One Big Beautiful Bill Act makes the repeal permanent on July 1, 2027.
The U.S. isn't alone in this. The EU ended its €150 duty exemption for low-value parcels on July 1, 2026, replacing it with a flat €3 duty per item category through 2028. U.S. brands shipping to European customers now face their own version of the same problem.
How the end of de minimis affects ecommerce businesses
Under Section 321, goods worth $800 or less could cross the U.S. border with very little customs processing. Neither the seller nor the buyer paid a duty, and nobody had to prove exactly what a package contained at the border. That simplicity is gone. Every import, regardless of value, now goes through customs and owes duty at whatever rate applies to it.
For sellers who only ever shipped under the threshold, you’re expected to learn U.S. import rules that you could skip over before. Here are some key terms and concepts:
- Importer of record: The party legally responsible for goods entering the country. It files the paperwork, pays the duties, and answers to customs if something is wrong.
- Duties and tariffs: A tariff is the rate the government sets for a type of product from a given country. The duty is the tax you owe on a specific shipment once that rate is applied.
- HTS code: The Harmonized Tariff Schedule (HTS) code classifies each product. Combined with country of origin, it determines your duty rate.
- Customs entry: The declaration filed with U.S. Customs and Border Protection (CBP). Low-value shipments use a simpler informal entry, while higher-value shipments require a formal entry and a customs bond.
- Customs brokerage: Licensed brokers file customs entries for shipments on the importer's behalf, for a fee. Carriers now pass these fees through on individual parcels.
- Landed cost: The full cost of getting a product to where you sell it, including product cost, freight, insurance, duty, and brokerage.
Companies buying goods by the pallet or shipping container have always filed formal entries and paid duty, and businesses that import in bulk and hold inventory stateside rarely relied on de minimis to begin with.
The changes land on businesses that ship individual orders across the border: cross-border marketplaces, dropshippers, and brands that fulfill from warehouses in China, Canada, or Mexico. For them, every order is now a customs event with its own classification, duty, and brokerage fee.
Of those businesses, foreign ecommerce brands selling into the U.S. feel it hardest. It may seem odd, since the importer of record pays the duty, not the seller – isn’t the customer the one importing? On a cross-border order, the seller or the customer can fill the role of the importer of record, which is a dynamic that is difficult for the seller either way:
- The seller pays the duty. Under delivered duty paid (DDP), the seller acts as the importer of record through its carrier or broker, then absorbs the cost or raises prices.
- The customer pays the duty. Under delivered duty unpaid (DDU), the customer gets a bill for duty and brokerage fees before the package is released. Some refuse to pay, leaving the seller to cover the return or lose the sale.
Only one way out of the problem remains: moving inventory stateside. A brand imports inventory in bulk, pays duty once on a consolidated shipment, and takes on the responsibilities of a U.S. importer of record.
To see how much that changes the math, consider a hypothetical brand that sells a hoodie for $60 and buys each one from an overseas supplier for $12. Like many small ecommerce brands, it doesn't keep inventory in the U.S. When a customer places an order, its supplier's warehouse in China ships that hoodie directly to the customer's door.
The table below shows what one order costs the brand under the old rules, under the new rules with the same setup, and under the new rules if it imports in bulk and ships from a U.S. warehouse.
Figures are illustrative. Duty rates depend on each product's HTS classification and country of origin, and brokerage fees vary by carrier and broker.
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7 ways ecommerce businesses can adapt to the end of de minimis
The hoodie example depicts the worst case: a brand whose entire model depended on duty-free parcels. Most ecommerce businesses will experience something less dramatic, but any business that imports will need to revisit some part of its operations.
Here are seven tips for navigating the changes to de minimis in the US for your business:
1. Expect de minimis to stay gone for good
Some sellers held off on restructuring after the Supreme Court struck down the IEEPA tariffs in February, expecting the de minimis suspension to fall with them. It didn't. On August 13, the Court of International Trade ruled that the president had authority to end the exemption, and the One Big Beautiful Bill repeals it by statute on July 1, 2027. Plus, with the EU striking down their duty-free protections, the change is now a larger global trend. Build your forecasts around paying duty on every import, regardless of value, from here on out.
2. Get your HTS codes right for every SKU
[this seems like a crazy claim to make] When customs was looser for parcels under $800, an approximate HTS code wasn’t a big deal. Now it determines what you owe, and getting it wrong can result in penalties. Duty depends on how each product is classified and where it was made, and a code that's slightly off can mean paying the wrong rate or getting flagged at the border. Pull the correct HTS code and country of origin for every SKU you import to avoid trouble and get more accurate numbers.
3. Calculate landed cost per unit, not per shipment
Rebuild your landed cost for each unit you sell: product cost, freight, duty, brokerage, and fees. As the hoodie example shows, larger consolidated shipments usually come out ahead. You clear customs once and spread entry costs across thousands of units instead of paying them for every order.
4. Move inventory into the U.S. if you fulfill from overseas
If your orders ship straight from a supplier or warehouse overseas, each one now pays duty on the retail price, plus its own brokerage fee. In the hoodie example, that cut the brand's margin from 67% to 14%. Raising prices can win back some of that margin, but a large enough increase may send customers to competitors who already stock domestically. If your sales are steady enough to forecast demand, it's worth pricing out a move to bulk imports and U.S. fulfillment.
5. Place inventory near your customers
Consolidating inbound freight solves the duty problem, but not the distance problem. If all your stock lands in one building and your customers are spread across the country, you've traded per-parcel duty for higher outbound shipping costs. Look at where your orders concentrate, and consider splitting a consolidated shipment across fulfillment locations near those customers.
6. Compare the full cost of warehousing
Holding inventory in the U.S. only pays off if the duty and brokerage you save on each order outweigh what it costs to store and ship that order domestically. When you collect warehouse quotes, look past the price per square foot. You'll also pay for staff or a 3PL to receive and pack orders, software to track stock, and domestic shipping. In the hoodie example, domestic fulfillment added $10 per order, but the brand saved more than $27 in duty and brokerage. Use a similar breakdown with your own numbers before signing a lease or a 3PL contract.
7. Look into ways to defer or recover duty
A standard import requires paying duty on the whole shipment when it clears customs, before you've sold any of it. Foreign-trade zones (FTZ) and bonded warehouses let you store imported goods without paying duty until they enter the U.S. market, so you pay as you sell. If some of your inventory later ships to international customers, duty drawback lets you recover most of the duty you paid on those units. Setting these up on your own is usually impractical for a small business, but many 3PLs already operate inside an FTZ or as bonded facilities.
Manage the new cost of importing with Slash
Every step above changes how an ecommerce business spends money. Supplier payments get larger and cross borders more often, duty becomes a new line item for more businesses, and freight forwarders, brokers, and 3PLs become regular vendors. Slash is a business banking platform that puts all of those payments in one place.¹ With one account, ecommerce operators can:
- Pay suppliers wherever they are. Send wires through SWIFT to 180+ countries, or pay in USDC and USDT stablecoins for suppliers in markets where receiving U.S. dollar wires is slow, expensive, or difficult.⁴
- Earn back some of the new costs. Put freight, brokerage, and 3PL invoices on the Slash Visa Platinum Card and earn up to 2% cash back on eligible spending.
- Cover cash flow gaps. Working capital financing through Slope offers 30-, 60-, and 90-day terms, so a large inventory order and its duty bill don't have to drain your balance before sales come in.⁵
- Keep your landed cost accurate. Integrations with QuickBooks Online, Xero, NetSuite, and more send every transaction straight to your books.
For brands based outside the U.S., moving inventory stateside means taking on a roster of American vendors. U.S. 3PLs, customs brokers, and carriers bill in dollars, and paying them from a local-currency account means converting money and absorbing exchange costs on every invoice. The Slash Global Account, available in 130+ countries with no U.S. entity required, lets you hold U.S. dollars and pay American partners in their own currency.
De minimis let ecommerce brands ignore the small costs of importing. Those costs are back, and the brands that come out ahead will be the ones that manage them closely. With Slash, you can. Click here to get started.
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