TMTPOST – The United States officially ended its longstanding tariff exemption for package shipments valued under $800 on Friday, a move expected to increase costs for e-commerce businesses, small retailers, and consumers while reshaping supply chain dynamics.

Beginning at 12:01 a.m. EDT (0401 GMT), the U.S. Customs and Border Protection (CBP) agency began collecting standard duty rates on all global parcel imports, regardless of their value, country of origin, or shipping method. For packages shipped via foreign postal agencies, CBP offered a temporary flat-rate duty option ranging from $80 to $200 per parcel over a six-month transition period.

The policy change builds on the Trump administration’s previous suspension of the de minimis exemption for packages from China and Hong Kong in May, aimed at curbing the flow of fentanyl and its precursor chemicals into the United States.

“President Trump’s ending of the deadly de minimis loophole will save thousands of American lives by restricting the flow of narcotics and other dangerous prohibited items, and add up to $10 billion a year in tariff revenues to our Treasury,” White House trade adviser Peter Navarro said on Thursday.

A senior administration official stressed that this is a permanent measure, adding that any efforts to restore exemptions for trusted trading partners are “dead on arrival.”

The de minimis exemption, which had been in place since 1938, allowed goods valued below a certain threshold to enter the U.S. duty-free. Initially set at $5 for gift imports, it was raised to $800 in 2015 to encourage small business growth on e-commerce platforms.

However, direct-to-consumer imports from China surged following the imposition of tariffs on Chinese goods during Trump’s first term. Retailers like Shein and Temu leveraged the exemption to deliver packages directly to U.S. consumers, creating a new model for cross-border e-commerce.

The National Coalition of Textile Organizations welcomed the change, calling it a “historic win” for U.S. manufacturing. The group noted that foreign fast-fashion imports often avoided tariffs, undercut domestic producers, and in some cases relied on forced labor.

“The administration’s executive action closes this channel and delivers long overdue relief to the U.S. textile industry and its workers,” the organization said.

CBP estimates that packages claiming the de minimis exemption increased nearly tenfold from 139 million in fiscal 2015 to 1.36 billion in fiscal 2024, equating to roughly 4 million parcels per day.

Analysts warn that the removal of the exemption will likely drive up prices for many e-commerce goods, as items previously exempt from duties will now incur tariffs. This could level the playing field between e-commerce retailers and traditional bulk importers, such as Walmart, whose shipments have long been subject to standard tariffs.

Since the May removal of exemptions for China and Hong Kong, CBP has already collected more than $492 million in additional duties, a senior Trump administration official said.

All packages shipped by express carriers, including FedEx, UPS, and DHL, will be subject to full tariff rates. These carriers are generally better equipped to collect duties and handle customs documentation than traditional postal services.

Foreign postal agencies may either calculate duties based on parcel value or use a flat-rate system tied to Trump-era reciprocal tariffs. For instance, CBP guidance issued Thursday sets flat duties at $80 for countries with rates under 16% (e.g., Britain, EU), $160 for rates between 16% and 25% (e.g., Indonesia, Vietnam), and $200 for rates above 25% (e.g., China, Brazil, India, Canada). By February 28, 2026, postal services are required to shift to full value-based (“ad valorem”) duty collection.

Some foreign postal services have temporarily suspended U.S. shipments, although officials said they are working with international partners and the U.S. Postal Service to minimize disruptions.

Kelly Ann Shaw, a former senior White House trade official during Trump’s first term, predicted initial disruptions but expressed confidence in a smooth long-term adjustment.

“I think there will be growing pains as this unfolds, but it is U.S. law,” Shaw, now at the Akin Gump law firm, said. “There will be a bit of a transition time while CBP figures out how to process these low-value shipments, which it hasn’t had to do in many years.”

For e-commerce businesses and small enterprises, the new duties will require recalibrating supply chains, adjusting pricing strategies, and managing additional customs paperwork. The change also signals a shift in U.S. trade policy, aiming to protect domestic industries and prevent prohibited imports while generating substantial revenue for the Treasury.

As the U.S. enforces full duties on all low-value imports, companies will need to navigate a new operational landscape. Experts expect some short-term price increases and administrative friction, but they believe that over time, the market will adapt.