Customs confusion and price increases anticipated as U.S. concludes duty-free imports
The policy change is anticipated to burden businesses with increased expenses, lead shoppers to face higher prices, and create significant congestion in customs systems due to unprecedented bottlenecks.
TroibNews 
Low-value imports from China are no longer exempt from duties, following the decision by U.S. President Donald Trump's administration to end the de minimis treatment for imports valued at $800 or less from the Chinese mainland and the Hong Kong Special Administrative Region on May 2.
The termination of this rule, which allowed up to 4 million low-value parcels to enter the U.S. each day, is poised to disrupt supply chains, increase costs for consumers, and lead to customs delays.
This policy change is anticipated to significantly impact businesses, raising costs and causing shoppers to face higher prices, while also overwhelming customs systems with increased bottlenecks.
Businesses are adapting to the new reality. Major e-commerce platforms have had to restructure supply chains, increase product prices, and expedite the development of U.S. warehouses to counter new tariff costs, according to reports from Reuters.
As a result of these changes, some foreign sellers have halted shipments to the U.S., and several smaller businesses have completely exited the market. According to Bloomberg, some e-commerce platforms have seen price increases of over 100 percent, with widespread complaints on social media about shipping delays.
Domestic U.S. businesses are also making necessary adjustments. The Wall Street Journal reported that one American footwear brand had to relocate its inventory from Canada to U.S. warehouses after determining that a pair of sneakers made in China, originally priced at $175, would incur more than $300 in duties if shipped via Canada.
Even Trump has admitted that his tariffs might lead to fewer and costlier products in the U.S., stating on April 1 that U.S. children could now "have two dolls instead of 30 dolls" and that "maybe the two dolls will cost a couple bucks more than they would normally."
U.S. consumers are also feeling the impact. For many Americans used to shopping online, clicking the "Buy Now" button now comes with the discomfort of watching their cart totals rise and extended delivery timelines.
A report by the Congressional Research Service indicated that removing the de minimis exemption “would reduce aggregate welfare by $10.9-$13.0 billion and disproportionately hurt lower-income and minority consumers.”
Experts highlight that this policy chiefly impacts low-income households, which often depend on affordable cross-border e-commerce items such as clothing, everyday essentials, and small electronics.
Scott Lincicome, a researcher at the Cato Institute, noted that while the policy may seem aimed at China, it effectively represents a tax increase for American consumers. He remarked that it results in higher prices and delayed deliveries, with U.S. consumers ultimately bearing the costs of the policy.
The policy is also expected to strain U.S. customs systems significantly, likely leading to clearance delays.
In a white paper published on April 9, China's State Council Information Office stated that applying the duty-free de minimis treatment helps decrease administrative costs, allowing customs to allocate more resources toward supervising higher-value and high-risk products, thereby enhancing overall supervision effectiveness.
However, withdrawing the duty-free rule will incur substantial costs associated with individually checking and taxing low-value packages, including logistics and customs clearance, as noted by the office.
This logistical challenge is precisely why the U.S. Congress established the de minimis exemption in 1938, having recognized that inspecting and taxing low-value packages often cost more than any potential revenue gained.
Similarly, the Trump administration had previously abandoned a plan to revoke the exemption in February due to early reports of package backups linked to a failure in the U.S. Customs and Border Protection screening system.
Now, the CBP has acknowledged that it faces “a massive task at hand,” but is prepared to enforce duties on small shipments from China.
Strict enforcement of declared values by CBP could lead to chaos, as warned by Derek Lossing of Cirrus Global, who painted a bleak picture to Reuters, suggesting the new policy could necessitate over 10,000 daily shipment inspections.
"It could become chaotic very quickly," stated Lossing.
An estimate from Oxford Economics also indicates that if the U.S. government aims to inspect and tax each small parcel individually, it could require at least several billion dollars in additional funding to enhance systems and hire staff, or else risk widespread port congestion.
Lucas Dupont for TROIB News
The termination of this rule, which allowed up to 4 million low-value parcels to enter the U.S. each day, is poised to disrupt supply chains, increase costs for consumers, and lead to customs delays.
This policy change is anticipated to significantly impact businesses, raising costs and causing shoppers to face higher prices, while also overwhelming customs systems with increased bottlenecks.
Businesses are adapting to the new reality. Major e-commerce platforms have had to restructure supply chains, increase product prices, and expedite the development of U.S. warehouses to counter new tariff costs, according to reports from Reuters.
As a result of these changes, some foreign sellers have halted shipments to the U.S., and several smaller businesses have completely exited the market. According to Bloomberg, some e-commerce platforms have seen price increases of over 100 percent, with widespread complaints on social media about shipping delays.
Domestic U.S. businesses are also making necessary adjustments. The Wall Street Journal reported that one American footwear brand had to relocate its inventory from Canada to U.S. warehouses after determining that a pair of sneakers made in China, originally priced at $175, would incur more than $300 in duties if shipped via Canada.
Even Trump has admitted that his tariffs might lead to fewer and costlier products in the U.S., stating on April 1 that U.S. children could now "have two dolls instead of 30 dolls" and that "maybe the two dolls will cost a couple bucks more than they would normally."
U.S. consumers are also feeling the impact. For many Americans used to shopping online, clicking the "Buy Now" button now comes with the discomfort of watching their cart totals rise and extended delivery timelines.
A report by the Congressional Research Service indicated that removing the de minimis exemption “would reduce aggregate welfare by $10.9-$13.0 billion and disproportionately hurt lower-income and minority consumers.”
Experts highlight that this policy chiefly impacts low-income households, which often depend on affordable cross-border e-commerce items such as clothing, everyday essentials, and small electronics.
Scott Lincicome, a researcher at the Cato Institute, noted that while the policy may seem aimed at China, it effectively represents a tax increase for American consumers. He remarked that it results in higher prices and delayed deliveries, with U.S. consumers ultimately bearing the costs of the policy.
The policy is also expected to strain U.S. customs systems significantly, likely leading to clearance delays.
In a white paper published on April 9, China's State Council Information Office stated that applying the duty-free de minimis treatment helps decrease administrative costs, allowing customs to allocate more resources toward supervising higher-value and high-risk products, thereby enhancing overall supervision effectiveness.
However, withdrawing the duty-free rule will incur substantial costs associated with individually checking and taxing low-value packages, including logistics and customs clearance, as noted by the office.
This logistical challenge is precisely why the U.S. Congress established the de minimis exemption in 1938, having recognized that inspecting and taxing low-value packages often cost more than any potential revenue gained.
Similarly, the Trump administration had previously abandoned a plan to revoke the exemption in February due to early reports of package backups linked to a failure in the U.S. Customs and Border Protection screening system.
Now, the CBP has acknowledged that it faces “a massive task at hand,” but is prepared to enforce duties on small shipments from China.
Strict enforcement of declared values by CBP could lead to chaos, as warned by Derek Lossing of Cirrus Global, who painted a bleak picture to Reuters, suggesting the new policy could necessitate over 10,000 daily shipment inspections.
"It could become chaotic very quickly," stated Lossing.
An estimate from Oxford Economics also indicates that if the U.S. government aims to inspect and tax each small parcel individually, it could require at least several billion dollars in additional funding to enhance systems and hire staff, or else risk widespread port congestion.
Lucas Dupont for TROIB News
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