President Trump has recently caused a stir in the business community by bringing forward the end of the US de minimis provision by two years to 29 August, but why does this matter?
We spoke to Lyn Dewsbury and Roger Marshall, trade and customs consultants at the Chartered Institute of Export & International Trade, to find out.
What is de minimis?
De minimis is a minimum value below which imported goods can enter a country without incurring customs duties or taxes.
In the US, this threshold has been set at US$800 and this has enabled an easier flow of low-value goods into the country.
The exemption has been particularly significant for the business-to-consumer (B2C) e-commerce sector.
What is changing?
Earlier this summer, Donald Trump signed an executive order to bring forward his administration’s decision to end de minimis for imports into the US.
The exemption will be withdrawn from 29 August 2025, meaning all imports, regardless of their value, will be subject to customs clearance procedures and potential duties from this time.
What do the de minimis changes mean for exporters?
For exporters currently sending low-value consignments to the US, the withdrawal of de minimis could lead to extra costs, as new import taxes, including customs duties, will now apply.
Customs declarations may also need to be completed, and it is expected that, for firms sending goods to US B2C consumers, these will be handled by the courier (e.g. Fedex, UPS, DHL and others). Couriers are likely to charge exporters for the cost of completing the declarations, as well as for any duties and other charges the goods will now attract.
Because all imports into the US will now be subject to customs clearance, goods and their accompanying customs documentation could now also be subject to checks at the border. This could slow down the time in which goods move into the US, potentially creating unexpected delays.
If you are unsure of what you need to do meet these new requirements, you should get advice from a customs expert. Chartered Institute business members can get expert support on de minimis via the Technical Helpline service.
What duties will firms need to pay?
The de minimis changes are being implemented in the same year as the Trump administration’s decision to raise ‘reciprocal’ tariffs on a majority of its trading partners. This means imports into the US will be liable to higher duty costs than at any point in the last few decades.
The duties businesses will need to pay will depend on the economic origin and commodity code of their goods. For instance, most British goods entering the US will attract a 10% duty rate provided the exporter can prove their goods are ‘UK origin’.
Goods of Chinese origin, at the time of writing, will attract at least a 30% rate, but this could change when the current 90-day suspension of a threatened 145% rate ends, should a longer-term US-China trade deal not be reached.
You should be aware that a product’s economic origin is not necessarily the same as that of the business exporting it. This is particularly the case if the goods are manufactured in or made using materials from another country. For instance, a British exporter producing goods made from Chinese materials could be subject to the Chinese tariff rate, depending on the rules associated with their commodity code.
Again, you should get advice from a trade or customs expert if you are not sure what the origin of your goods is. The Chartered Institute’s Rules of Origin training course could be useful for businesses grappling with de minimis changes.
What impact will the de minimis changes have on businesses?
The changes will have a significant impact on overseas exporters sending low-value goods into the US, especially in the international e-commerce sector which has typically benefited from the de minimis exemption.
It will particularly affect exporters whose sales strategy in the US relies on competitively low pricing. These businesses will need to decide whether to absorb the added costs, raise prices or restructure their supply chains.
Large Chinese e-commerce exporters, such as Temu and Shein, have already seen US sales drop as a result of Trump’s announcement that he will end de minimis this year, according to the FT.
However, SME exporters from all over the world will also be affected, particularly given the US president’s sudden announcement that he will bring forward the end of the exemption by two years. Small companies will be less well-placed to absorb the additional cost or administrative burden that will come with the end of the exemption.
One SME told us that Trump’s decision to bring forward the change made an “already tricky situation instantly impossible”, adding that they suspect many businesses will “go under” because of this.
What impact will de minimis have on consumers?
For US consumers, the end of de minimis could lead to higher prices if businesses pass on the additional costs. It could also mean slower delivery times, particularly if goods get held up for checks at the border.
In the short-term, the changes could also be disruptive, as couriers, intermediaries and border agencies grapple with the additional new checks and documentary requirements.
Why is Trump ending de minimis?
The White House has said that the de minimis exemption was being used by overseas exporters to "evade tariffs and funnel deadly synthetic opioids" to the US. It said the decision to bring the withdrawal forward was because it wanted "to deal with national emergencies and save American lives and businesses now".
Domestic retailers and independent e-commerce firms in the US could stand to benefit from less international competition within the American market. Firms with business models oriented around quality over low cost could also stand to benefit.
Trump’s protectionist trade agenda more broadly, including increased tariffs, has been designed to protect US manufacturing and rebalance trade surpluses with other countries.
Further reading
· Subscribe for free to the Chartered Institute’s Daily Update newsletter for further news updates and analysis of the de minimis changes
· Chartered Institute members can read an exclusive ‘Ask the Experts’ Q&A with Dewsbury and Marshall about de minimis, including practical answers to questions about how to navigate the changes
· Businesses can also benefit from training and educational support to navigate the impact of new US tariffs on their supply chains through our US Tariffs Hub
