Its name means "so minor as to be disregarded." However, a new executive order targeting low-cost goods is anything but insubstantial.
President Donald Trump's executive order ended the de minimis exemption on August 28, 2025. With over 1.3 billion packages qualifying for the exemption in 2024, there are expected to be delays, costs, and disruptions in shipping that could be significant.
What Is the De Minimis Tariff Exemption?
Created in 1938 for imports with a value of under $1, the de minimis tariff exemption was last updated in 2015 to a minimum value of $800. That means the de minimis tariff exemption allowed the duty-free import of shipped goods valued under $800. Other countries have similar exemptions, although often it is lower. For example, the United Kingdom has a tariff exemption on goods valued at less than 135 pounds.
The idea behind the exemption is that low-cost goods are not worth the expense of collecting tariffs and can reduce the price of certain goods. However, the Trump administration argues that the exemption has become a loophole that other countries are exploiting — not just to import low-cost goods but also to allegedly bring fentanyl into the country.
Shippers claiming the de minimis exemption have risen dramatically in recent years. Last year, 1.36 billion packages with a combined value of $64.6 billion claimed the exemption. In 2015, it was 134 million packages, according to the Associated Press.
However, there are serious concerns that ending the de minimis exemption will increase inflation. The Tax Foundation, a center-right nonprofit policy organization, estimated that current tariff rates, including the end of the de minimis exemption, will cost an average of $1,304 per U.S. consumer in 2025.
What's the New Policy?
Importers will now have to pay a flat fee of $80 to $200 per package. The Trump administration hopes to tax those goods proportionally to their value in the future.
The flat fee is based on concerns over how the current global infrastructure will handle the new policy demands. For example, many international shippers have already suspended most of their U.S.-bound shipments of low-cost goods due to the rapid end of the exemption. Further complicating the issue are President Trump's tariff policies, which are being levied at different rates on a country-by-country basis.
The current offer of a flat duty option of between $80 and $200 per package, instead of being based on the shipment's value and tariff costs, may not be as attractive to importers as the Trump administration hopes, as demonstrated by the suspension of shipments. It remains to be seen how global infrastructure will adapt.
Low Tariffs for Low-Value Items From China
Just under two-thirds of the items that qualified in 2024 were from Hong Kong and China.
The Trump administration has already targeted low-cost goods from China. In May, the Trump administration and China reached a deal. Initially imposing a 120% tariff rate, it was lowered to 54%. According to the Reed Smith Trump Tariff Tracker, China's country-specific tariff is suspended until November 10, so Chinese goods will face a 10% baseline tariff rate on all goods, including low-value goods. A reciprocal tariff could increase to 34% in November unless a new deal is reached.
Expanding Worldwide
The de minimis exemption is now ending worldwide. Many economists fear the revocation will cause a substantial spike in inflation. Already struggling with the uncertainty and added costs from the previous Trump administration tariffs, some industries are already reporting layoffs, lowered production, and even closings.
The global economy is complicated, so there is built-in uncertainty as to the full effect the end of the de minimis tariff exemption will have. For now, American consumers might want to prepare for higher prices in the near future when visiting Walmart, Costco, and other companies reliant on imports.
Related Resources
- What Are Executive Orders? What Are Their Limits (FindLaw's Law and Daily Life)
- Justice Department Promises Increased Enforcement of Tariff Collections (FindLaw's Law and Daily Life)
- U.S. Import Requirements (FindLaw's Litigation and Disputes)
