If you own an American ecommerce business, chances are you鈥檝e felt pressure from Shein, Temu, and every other discount brand somehow capable of profitably selling pants for $2. Foreign companies like them have dominated domestic and global markets alike with ridiculously low prices on everything from footwear to electronics for several years now. Their ultra-competitive margins in the U.S. are largely attributable to loopholes in de minimis shipping 鈥� a long-standing exemption that allows goods under a certain value to enter the country duty-free.
Before the Presidential election, Joe Biden proposed changes to de minimis in hopes of leveling the playing field for American businesses. Now Donald Trump gets to decide if that plan evolves or even goes through at all. The stakes are high as either plan will affect the average business owner鈥檚 bottom line big time.
Let鈥檚 explore what possible paths forward look like and what you can do to prepare in any case:
What is de minimis shipping, and why is it being talked about in the first place?
De minimis shipping lets businesses import goods below a certain value without paying duties or taxes. The threshold varies by country but is always intended to make low-value shipments easier and cheaper to process. In the U.S., de minimis shipping was last amended in the , which actually increased the value of goods eligible for exemption from $200 to $800.
While well-intended, de minimis shipping has its flaws. Foreign companies have long exploited what was meant for small businesses by underreporting the value of their shipments or by splitting large orders into smaller ones to slip under the radar. This recently led the U.S. government to on some previously exempt categories of products 鈥� specifically those valued at $800 or less and subject to U.S. trade enforcement actions under Section 301, Section 201, and Section 232.
The three aforementioned sections cover import-sensitive items like textiles, footwear, and electronics, which compete directly with U.S. manufacturing sectors and have a significant impact on domestic employment and production. Section 301 tariffs currently make up about 40% of U.S. imports, including 70% of textile and apparel imports from China.
What is Joe Biden鈥檚 position on de minimis?
Biden鈥檚 original plan, announced in September 2024, was to cut exemptions for shipments valued at $800 or less and tack a $2 fee onto new eligible shipments into the United States. His proposal had multiple goals 鈥� boosting the economy and closing loopholes in this specific shipping exemption. There were some political interests at play, as well.
This initiative promised all the things people want to hear in the lead up to an election 鈥� more domestic spending, investments in the North American manufacturing industry, and new jobs in the domestic manufacturing sector. Trump promised that, too, but through a different plan.
How Donald Trump鈥檚 trade plans complicate the future of de minimis reforms
Biden clearly wants to change de minimis, but we don鈥檛 know if Trump cares, and if so, why.
Trump made lots of economic promises on the campaign trail about tariffs but made no specific mention of de minimis. His plans to make top competitors like China pay more to import goods are considered to be driven by both economics and broader political strategy.
Like he plans to do with other policies implemented by the Biden administration, Trump could work to reverse this or simply leave it be and focus on his much-talked-about tariffs. We just don鈥檛 know whether this policy is on his radar at all.
What are the potential outcomes for de minimis exemptions?
If Joe Biden or Kamala Harris had won the U.S. Presidential election, new restrictions would be all but certain. Their current administration wanted to crack down on de minimis specifically and had already gotten the ball rolling. Lawmakers were set to review feedback from the public, government committees, and industry organizations about de minimis as part of the standard legislative process. The U.S.-China Economic and Security Review Commission recently brightened prospects by expressing support for new restrictions.
But it鈥檚 important to remember that this plan comes with caveats.
The that imposing duties on the over one billion goods currently covered by the exception, which are collectively valued at over $54 Billion, could cost anywhere between $8 Billion and $30 Billion annually. Some fear that increases would translate to higher prices and force small businesses to absorb increased costs.
How does de minimis restrictions affect ecommerce?
Doing away with de minimis exemptions means paying extra to import products you could once bring into the country duty-free. Current Harmonized Tariff Schedule rates range from 0% to 37.5% across categories, with 5.63% being the reported average.
For ecommerce businesses, that means having to figure duties into total landed cost, which might be margin breaking depending on the item at hand. There鈥檚 also more paperwork, plus an additional $2 fee on all new eligible shipments to help cover the administrative costs of processing it all.
How do tariffs affect ecommerce?
The Trump transition team hasn鈥檛 provided much detail about its plan, having only made a general promise to hit China with a 10% (or higher) tariff on imports across the board.
Economists are split on what kind of effect that would have. General tariffs may affect the economy in a much more far-reaching way, extending the impact beyond ecommerce to affect prices for everything from groceries to cars.
It鈥檚 even more uncertain what would happen if Trump decided to impose tariffs and see these original changes to de minimis through.
What timeline are de minimis changes going to be made on?
Tim Manning, a former Supply Chain Coordinator in the Biden-Harris administration, spoke about the de minimis proposal on a . He said he was 鈥�100% confident鈥� the Biden administration would issue a Notice of Proposed Rulemaking, and that they could do so by late November to early December. Now a couple of months out, progress is moving at a very bureaucratic pace.
The public is supposed to have 30 to 60 days to share their thoughts when a Notice of Proposed Rulemaking is published. The President and the Office of Information and Regulatory Affairs then review that input before drafting the final rule for implementation.
Will Trump stop changes to de minimis shipping exemptions?
No matter how you feel about him, if there鈥檚 one thing most people accept about the President-elect, it鈥檚 his unpredictability. He could reverse plans to implement de minimis restrictions or not touch them at all. We just don't know whether he would consider doing so worthwhile.
With no explicit statements about this specific policy, it鈥檚 possible he hasn鈥檛 made up his mind. That makes engaging on this issue over the next few months much more important than it would have been otherwise.
Where should I stand on de minimis exemptions?
Unfortunately, the question at hand here isn鈥檛 whether you want to pay more, but how you want to do so. Biden鈥檚 proposal had multiple goals of boosting the economy and closing loopholes in this specific shipping exemption. Trump鈥檚 plans are considered to be part of a broader political strategy.
You could fall on either side of the fence. Some think the originally proposed de minimis reform is exactly what the economy needs and is key to putting Shein and Temu out of business in America for good. Others 鈥� specifically those who source products from China or have tight shipping margins 鈥� are more worried about the potential implications for their bottom line.
Can I do anything to influence the outcome of changes to de minimis?
Trump鈥檚 White House win may make everyone鈥檚 perspective more influential in where de minimis goes from here. Input will be very influential to both the outgoing and incoming administrations. Negative feedback could create political pressure on lawmakers to reassess specific restrictions or potentially halt things altogether. Support for the policy, however, would get it implemented faster and maybe give Trump a reason to keep it in place.
How can I protect my ecommerce business from potential changes to de minimis?
Beyond making their voice heard, the best thing anyone can do right now is prepare as if Trump lets the de minimis plan go through. That means reviewing your supply chain to identify which products will be impacted, adjusting prices based on the possible new total landed cost, and educating your team about what鈥檚 going on. Also, be ready to start providing HTS classifications down to the 10-digit level for all products you ship 鈥� not just those that previously fell under the de minimis exemption.
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