You’ve probably seen the headlines about packages from Temu or Shein suddenly costing twice as much. Maybe you tried to order a $20 power strip and realized the "shipping and fees" were more than the actual item. This isn't just a glitch in the app. It’s the result of a massive shift in how the U.S. handles small imports.
For years, the "de minimis" rule was the secret sauce of the internet economy. It allowed any package worth under $800 to enter the country duty-free. No taxes. No paperwork. Just a straight shot from a factory in Shenzhen to a porch in suburban Ohio. But as of late 2025 and moving into 2026, that "loophole," as the Trump administration calls it, has been effectively slammed shut.
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Honestly, the change is jarring. If you're a business owner or just someone who likes a good deal, the landscape has fundamentally shifted. We aren't just talking about a small tax; we are talking about a total overhaul of Section 321 of the Tariff Act of 1930.
The End of the $800 Free Pass
Let’s get the facts straight. On August 29, 2025, the Trump administration officially suspended the de minimis exemption for almost all commercial shipments. This wasn't a slow rollout. It was an executive order—EO 14324—that basically said if you're bringing goods in for sale, you're paying up.
Why now? The White House pointed to a few things. First, the sheer volume. In 2024, the U.S. saw over 1.3 billion of these small "de minimis" packages. Customs and Border Protection (CBP) was drowning. They argued they couldn't possibly scan all those boxes for fentanyl or counterfeit goods. Second, the "One Big Beautiful Bill Act" (OBBA) gave the President broad authority to hammer down on what they viewed as unfair competition for American retailers.
If you're shipping from China or Hong Kong, the rules got even tighter much earlier, back in May 2025. Now, those packages are hit with what people are calling "fentanyl tariffs" or reciprocal duties. We are looking at rates that can hit 120% of the product's value.
What This Looks Like for Your Wallet
Imagine you’re buying a $50 pair of sneakers from an international site.
- Before the change: You paid $50 + maybe $5 shipping. Total: $55.
- Now: That same $50 item might attract a flat duty of $80 to $200 if it's sent via the international postal network, or a massive ad-valorem tax.
It sounds crazy because it is. For many low-value items, the tax is now higher than the price of the goods. This is why Temu and Shein users saw their daily active usage drop by over 25% to 50% almost immediately after the May 2025 changes. The math just doesn't work for the consumer anymore.
How Businesses Are Scrambling to Survive
If you run an e-commerce brand, you're likely feeling the heat. The "drop-shipping" model, where you never touch the inventory and just have it sent from a factory to the customer, is essentially dead for U.S. markets.
Companies are now forced to "bulk up." Instead of sending 1,000 individual packages, they are importing 1,000 items in a shipping container, paying the formal entry duties (Type 01 entries), and storing them in U.S. warehouses. This is great for domestic warehouse owners, but it’s a nightmare for small businesses that don't have the capital to sit on months of inventory.
The Logistics Nightmare
It’s not just the money; it’s the paperwork. Before, you just needed a bill of lading. Now, CBP is requiring 10-digit HTS (Harmonized Tariff Schedule) codes for almost everything.
- More Audits: CBP completed 71 audits in early 2025 alone, finding hundreds of millions in unpaid duties.
- Carrier Surcharges: FedEx and UPS have added "demand surcharges" to handle the extra processing.
- Postal Suspensions: Hongkong Post actually stopped accepting certain types of mail to the U.S. because they didn't want to be the ones collecting Trump's tariffs at the window.
Section 321 and the Legal Fight
There is a lot of talk about whether this is even legal. The "One Big Beautiful Bill Act" technically set a deadline of July 1, 2027, to fully repeal the de minimis law. But the administration used the International Emergency Economic Powers Act (IEEPA) to speed it up.
Groups like the Ecommerce Innovation Alliance are fighting back, arguing that this disproportionately hurts low-income families who rely on cheap imports for essentials. There’s a high-stakes case heading through the Federal Circuit right now. But honestly? Don't hold your breath for a quick reversal. The administration has made it clear that if one legal path is blocked, they’ll just use another one. They view this as a national security issue, not just a trade one.
The 2026 Reality: What’s Next?
As we move through 2026, the "flat fee" methodology for postal shipments is being phased out in favor of ad-valorem (percentage-based) duties. By February 28, 2026, the old $80-$200 flat fees will likely be gone, replaced by complex calculations based on the country of origin.
We are also seeing "transshipment" penalties. If you try to be clever and ship Chinese goods through Vietnam or Mexico to avoid the China-specific tariffs, you might get hit with a 40% penalty. CBP is getting very good at tracking "country of origin" even when the box has a different return address.
Actionable Steps for 2026
If you're still trying to navigate this mess, you can't just wait it out. Here is what's actually working for people on the ground:
- Move to "Half-Custody" Models: This is what Temu is doing. They are asking factories to ship in bulk to U.S. warehouses before the sale happens. It's expensive upfront but avoids the per-package tariff nightmare.
- Audit Your HTS Codes: If you're using the wrong 10-digit code, you're a sitting duck for a CBP audit. Get a customs broker. It’s no longer optional.
- Diversify Sourcing: The tariffs on China are the highest, but "reciprocal tariffs" apply to dozens of other countries. You need to calculate the "landed cost" for every single SKU.
- Update Your Terms of Service: If you are still shipping from overseas, make sure your customers know they are the importer of record and might be hit with a bill from the mailman. Otherwise, you’ll be buried in returns and chargebacks.
The era of "frictionless" global trade is over. It’s been replaced by a system that rewards domestic inventory and punishes the small-parcel, direct-from-factory model. It’s a tough pill to swallow, but the businesses that survive 2026 will be the ones that stop looking for loopholes and start building a localized supply chain.
Immediate Priority: Review your current shipping data from the last 90 days. Calculate what your margins would look like if every shipment was hit with a 20% baseline tariff plus a $15 processing fee. If that wipes out your profit, you need to transition to a U.S.-based fulfillment center immediately to take advantage of bulk entry rates.