The End of De Minimis: What Retailers Need to Know Now

On August 29, 2025, an unprecedented policy change hit the cross-border e-commerce world: the end of the $800 de minimis exemption for U.S. imports.

For years, worldwide retailers, dropshippers, marketplaces, and exporters relied on this threshold to send low-value goods into the U.S. without triggering duties, taxes, or heavy customs procedures. It was a loophole that made small parcel shipping simple and profitable.

That’s over.

What Does the Closure of the De Minimis Exemption Mean?

From now on, every package entering the United States, regardless of its value or how it arrives, must go through a formal customs declaration. Duties and taxes will apply based on the type of product and its country of origin. It doesn’t matter whether it’s a $20 phone case or a $500 handmade sweater. The same rules apply across the board.

Import costs may increase, as duties are applied based on several variables: the product category (such as general duty rates), the material type (for example, tariffs on metals like steel, aluminum, or copper), or the country of origin (with specific tariffs imposed under the International Emergency Economic Powers Act, which vary from one country to another).

This change is already being felt. Online retailers who built their business models on fast, duty-free shipping are now navigating a very different landscape. Costs are rising. Margins are tightening. And on the customer side? Unless the seller takes control of the Delivered Duty Paid (DDP) model, the customer may only discover the total cost when the package reaches the border.

With DDP, the seller handles all customs formalities in advance and includes duties/taxes in the checkout price. The customer knows exactly what they’ll pay. No surprises, no post-sale refusals.

For businesses operating on thin margins, every unexpected charge eats into profits. The added paperwork, compliance requirements, and declaration formalities are more than an administrative task. They’re friction points that can slow down deliveries, frustrate buyers, and trigger returns.

And in an age where shipping speed and reliability define buyer expectations, any delay or extra cost risks eroding trust.

Returns are likely to become another big headache. In some cases, even returned merchandise is being flagged for duties a second time, making it more expensive than ever before. And it forces companies to rethink how they handle reverse logistics in response to this new regulatory pressure.

That doesn’t mean there aren’t solutions. Several forward-looking retailers have already taken steps to adapt. 

Tips for Minimizing the Impact of the De Minimis Suspension

1. Review your product classifications
   For starters, many are reviewing their product classifications more carefully—both the Harmonized Tariff Schedule (HTS) codes and the descriptions of the goods. Accuracy matters. A vague or incorrect classification can not only delay shipments but also lead to higher duty rates. 
   
   On the other hand, a well-documented, properly classified product can sometimes qualify for preferential treatment under trade agreements. Small changes, when made by the book, can translate into real savings. Read our latest guide on Finding the Right HTS Codes for Your Products.

2. Rethink your trade agreements
   Others are revisiting trade agreements. Depending on where the goods are produced, there may still be opportunities to benefit from reduced or even zero-duty rates under agreements like the USMCA. However, these advantages don’t occur automatically; they require paperwork, compliance, and a clear understanding of the rules.

3. Switch to DDP shipping
   As mentioned earlier, some companies are now moving from Delivered Duty Unpaid (DDU) to DDP shipping. This approach may slightly raise the upfront cost at checkout, but it eliminates surprises at the border and gives customers full visibility into what they’re paying—reducing the risk of delivery refusals and returns.

4. Consolidate shipments
   For high-volume sellers, consolidating shipments is becoming an increasingly popular strategy. Instead of sending dozens of individual parcels, businesses are shipping in bulk to a U.S. distribution point, then handling last-mile delivery from there. This can reduce declaration overhead and accelerate delivery timelines.

5. Rely on experts and technology platforms
   Many retailers are turning to customs brokers and tech platforms that specialize in cross-border compliance. These partners help streamline declarations, manage duties, and ensure that everything runs according to regulation without slowing down operations.
   
   
6. Consider U.S. incorporation
   For some Canadian retailers, incorporating a U.S.-based company and importing directly from suppliers into the U.S. may reduce tariff costs, but this must be evaluated case by case and with proper legal and tax guidance.

Here’s why it might help: duties are typically calculated based on the declared sale price. So, if your Canadian company sells a product at $100 USD, and that’s the declared value at the border, your duty could be 35% of that ($35 USD).

But if a U.S. company you own imports the same product directly from your supplier at $50 CAD, the 35% duty applies to the lower wholesale cost, not the retail price. That’s a significant difference.

Of course, this simplified example doesn’t factor in transport, brokerage, or overhead. And such a structure comes with its own costs and complexity. But for some, it’s a lever worth exploring, with the help of a customs broker, fiscal advisor, or cross-border trade specialist.

The end of the de minimis exemption is a fundamental change in how cross-border e-commerce will impact cost structures and profitability.

Businesses must adapt quickly. It’s the only way to keep shipping, pricing, and the customer experience in check.

At Buster Fetcher, we’ve seen what these changes look like on the ground. We work closely with retailers and exporters every day to navigate the complexities, avoid costly surprises, and protect their margins. If you’re still figuring out what this shift means for your logistics, now’s the time to reassess.

With the end of the de minimis exemption, visibility into shipping costs is no longer a nice-to-have. It’s mission-critical. 

This is where Shipping Monitor becomes more important than ever. Tracking every shipment in real time, identifying billing errors, and surfacing hidden surcharges gives businesses the data they need to stay on top of things. When every parcel now carries duties, taxes, and potential brokerage fees, having a clear view of what you’re really paying and where you can recover costs.

Because when the rules change overnight, staying still is the fastest way to lose ground.