The End of an Era: What the Repeal of Section 321 De Minimis Means for U.S. Businesses
A Fundamental Shift in U.S. Imports
A fundamental rule governing U.S. imports has been eliminated. Effective August 29, 2025, the Section 321 de minimis rule is no longer in effect. For years, this provision allowed imported shipments valued under $800 to enter the United States free of duty and entry requirements. With the de minimis threshold now set to $0, that era is over. All packages entering the U.S. are now subject to new requirements and duties, a change that fundamentally alters the landscape for American businesses involved in importing.
Why the Rule Existed in the First Place
The Section 321 de minimis rule was established with two primary justifications. First, from a practical standpoint, the administrative cost for U.S. Customs & Border Protection (CBP) to process an entry and collect duty on a very low-value item would often be greater than the duty collected. Second, the $800 threshold was intended to promote the growth of eCommerce and allow CBP to use its resources more effectively.
How a Good Idea Became a 'Monster'
What began as a practical measure soon became a loophole exploited by the explosive growth of global eCommerce. The volume of small package shipments taking advantage of the $800 threshold grew at an unsustainable rate. In 2015, when the $800 limit was enacted, the U.S. received 134 million small package shipments. By 2024, that number had skyrocketed to 1.36 billion.
This massive influx of packages created significant regulatory and security challenges, as shipments under the de minimis threshold were able to bypass critical U.S. requirements, including:
Other agency restrictions
Dumping duties
Quotas
Forced labor restrictions
Country of origin marking
Furthermore, security concerns mounted, as it was suspected that some of these packages contained dangerous goods, such as firearms and prohibited drugs, entering the country with minimal scrutiny.
The New Rules of Engagement for U.S. Importers
New Entry and Duty Mandates
As of August 29, 2025, all packages entering the United States, regardless of value, are subject to formal or informal entry requirements and duty payments.
The new duty structure is as follows:
Duties will be based on the tariffs established under the International Emergency Economic Powers Act (IEEPA) for the specific commodity and its country of origin.
A special rule applies to postal shipments for the first six months. Under this provision, importers can either pay a set duty of $80, $160, or $200 per item, or they can opt to pay the regular IEEPA tariff applicable to the item.
To facilitate this new process, CBP is also designating certain parties to handle the clearance of postal shipments. These changes were enacted following a Presidential Executive Order on July 30, 2025, which initially suspended the clearances, and were made permanent by the "Big Beautiful Bill" passed by Congress.
The Sole Exception: Bona Fide Gifts
A single exception to the new rule remains: bona fide gifts valued at less than $100 can still enter the U.S. without duty or entry requirements. For importers to utilize this exception correctly, packages must be clearly labeled "gift" in English. It is critical to note that there are severe penalties for fraudulently using this gift exception.
The Immediate Aftermath and Broader Impacts
The elimination of the de minimis rule has had dramatic and immediate effects on international trade.
Several countries paused shipments to the U.S. to adjust their processes and allow their exporters to adapt to the new rules.
International postal traffic to the United States decreased by an estimated 80%.
Major small package shippers, including FedEx, UPS, and DHL, have had to implement new clearance mechanisms to handle the sudden compliance burden.
Beyond these initial disruptions, the compliance burden for importers has expanded significantly. The very requirements that were previously bypassed by de minimis shipments—such as other agency restrictions and forced labor rules—are now the primary focus of expanded enforcement. It is assumed that CBP will enforce all other regulatory requirements on these small package shipments, including those related to:
Country of origin marking
Quotas
Dumping duties
Forced labor restrictions
Furthermore, prohibited articles will be subject to seizure. Reinforcing this shift, the Food & Drug Administration (FDA) has already confirmed that its requirements will apply to all imports regardless of value. It is a safe assumption that other U.S. Government agencies will follow suit. This signals a whole-of-government approach to enforcement, meaning importers must now prepare for scrutiny from a much wider range of regulatory bodies, even for low-value goods.
The Practicality of Enforcement
One of the original goals of the de minimis rule was to allow CBP to deploy its resources in a productive way. The repeal of this rule raises a critical question for the future of import enforcement: Will CBP dedicate the resources necessary to require a formal entry and collect duty on a very low-value item, such as a $25 parcel?
This question challenges the very principle of administrative efficiency that the rule was designed to uphold. While the practicalities of how CBP will enforce these rules on the lowest-value shipments remain to be seen, businesses must prepare for a more regulated and costly import process.