Trump Ends $800 Duty-Free Import Rule, Raising Costs on Millions PKG/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ President Trump ended the duty-free $800 exemption on imported parcels, effective Aug. 29, 2025. Small businesses warn of higher costs and supply disruptions, while postal services in over 30 countries suspend shipments to the U.S. The move is part of Trump’s tariff-driven trade agenda.
U.S. Tariff Rule Quick Looks
- De minimis exemption (shipments ≤ $800) ended Aug. 29, 2025
- Applies to all countries, including Mexico and Canada
- 30+ nations’ postal services temporarily halt U.S. deliveries
- Duties: flat fee $80–$200 for 6 months, then value-based (10–50%)
- Exemption began in 1938 for imports under $1
- Last raised to $800 in 2015 (from $200 in 1993)
- 2024: 1.36 billion shipments, worth $64.6 billion, claimed exemption
- 60% of imports came from China & Hong Kong
- Small businesses warn of store closures, higher prices
- Trump administration: rule was a “loophole for cheap imports & contraband”
Deep Look: Trump Ends Duty-Free Import Exemption
The United States has officially ended its long-standing “de minimis” tariff exemption, which allowed low-value imports worth up to $800 to enter the country duty-free. The change, effective August 29, 2025, marks a major shift in U.S. trade policy under President Donald Trump’s push to reduce reliance on foreign goods and enforce stricter tariffs.
The exemption, in place since 1938, was designed to save the government time and money by not taxing low-value imports. Over the decades, Congress steadily raised the threshold, most recently to $800 in 2015. Since then, imports under the rule ballooned, with 1.36 billion packages worth $64.6 billion entering the U.S. duty-free in 2024.
Global Postal Systems React
The sudden end of the exemption has rattled global trade networks. Postal services in more than 30 countries, including Australia, Japan, Mexico, India, New Zealand, and most of Europe, have suspended shipments to the U.S. citing lack of preparation to apply tariffs on small parcels.
For the next six months, mail carriers may impose a flat duty of $80–$200 per package. After that, all parcels — whether shipped by postal services or private couriers — will be taxed at their applicable value-based tariff rate, which ranges from 10% to 50% depending on the product’s origin.
Why the Rule Ended
The Trump administration argued that the exemption became a “loophole” exploited by foreign retailers such as Shein and Temu to flood the U.S. with cheap goods. Officials also claimed criminals used it to move counterfeit products, illegal drugs, and other contraband.
The National Council of Textile Organizations supported the move, saying it closes a “backdoor” for unfairly priced imports. However, many small American businesses that relied on overseas suppliers say the change will cripple their operations.
Small Businesses Fear Closures
For boutique owner Kristin Trainor of Avon, Connecticut, the end of de minimis may mean the end of her shop. More than 70% of her clothing stock comes from small designers in France, Italy, and Spain, often shipped in small batches under the $800 threshold.
A linen dress she used to import for $30 wholesale will now cost $43, she said, forcing her to raise retail prices or close altogether.
“The added customs and duty charges will eliminate affordability,” Trainor said. “I may have no choice but to shut down.”
In Oregon, Shannen Knight, owner of A Sight for Sport Eyes, imports specialized rugby goggles from Italy. She said the change would increase prices by 50%, making it harder to serve her niche market.
“Some products simply can’t be made in the U.S.,” Knight explained.
Ken Huening, founder of CoverSeal in California, said his Mexico-made car covers will now be taxed despite the USMCA trade agreement. He warned that U.S. supply chains cannot quickly replace foreign production.
Historical Context
- 1938: De minimis exemption created for imports under $1
- 1990: Raised to $5
- 1993: Raised to $200
- 2015: Raised to $800, sparking surge in small parcel imports
By 2024, 60% of de minimis shipments came from China and Hong Kong, with the rest from Canada, Mexico, the EU, India, and Vietnam.
What’s Next
The flat-rate duties will ease into value-based tariffs by early 2026. Businesses that relied on frequent low-value imports must now either absorb higher costs, pass them onto customers, or relocate supply chains.
Trump’s administration framed the move as part of his broader “Make America Healthy and Wealthy Again” trade agenda, while critics argue it risks higher consumer prices and squeezing small retailers out of business.
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