US Consumers Slated to See Price Increases By Friday After Removal of De Minimis Exemption

The Trump administration's removal of the de minimis tariff exemption will take place on Friday, sparking chaos among international carriers and likely leading to higher prices for American consumers.

The de minimis tariff exemption is a rule that exempts all items worth $800 or less from tariffs, allowing carriers to ship low-value goods into the US without formal customs paperwork or levies. The rule was passed in the 1930 Tariff Act, with the initial threshold beginning at just $1, but that level has been increased over the years.

On May 2, US President Donald Trump signed an executive order ending the de minimis exemption for China as part of his efforts to combat the opioid trade. Trump claimed that de minimis shipments were a secret way to smuggle drugs like fentanyl into the country, along with a way for business to avoid paying tariffs to the US government. Due to this, the removal of the exemption for China also heavily affected ultra-fast fashion and low-cost companies like Shein and Temu.

Then, after much discussion, Trump signed another executive order on July 30 stating that all de minimis exemptions would end on August 29– this Friday. Additionally, the One Big Beautiful Bill, passed on July 4, authorizes the US government to end the de minimis exemption by July 1, 2027, but Trump is attempting to speed up that process.

Around 90% of all shipments into the US are de minimis shipments, but none of them face tariffs or are inspected by the US Customs and Border Patrol (CBP). Because of this, external organizations are often able to send illegal drugs or other items into the country without being detected.

However, this also means that Americans will be seriously affected by the change. Many of the products that the average consumer purchases are de minimis shipments, as most people rarely buy items worth over $800 from week to week. As these regular items begin to face the tariffs placed on the rest of the world, consumers will begin to see the true impact of the levies on individual items purchased from overseas. Nevertheless, Americans are unlikely to see significant price increases at major stores, as larger companies already import items in bulk and have never used the de minimis exemption.

Additionally, various postal companies are also temporarily halting shipments to the United States to deal with the new changes. The removal of the de minimis rule means that all packages sent to the US will now face tariffs, no matter their value, which creates much more work for the carriers– many carriers are forced to pay tariffs to the CBP at the port of entry and collect the money from the importer later on.

Due to this added work, countless postal services have paused their shipments into the US. Among these carriers are DHL, the UK's Royal Mail, and the international post offices of various countries, including Spain, France, Belgium, India, and New Zealand. According to Finland's post office, multiple airlines have also halted all shipments, which could temporarily disrupt the exchange of packages between companies. However, the suspension of smaller shipments from carriers is unlikely to impact major stores, as they ship their items into the United States through large containers on cargo ships.

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Image credit to the Export Compliance Training Institute