Yesterday, President Trump issued an Executive Order (EO) amending the administration’s treatment of low-value imports — entries commonly referred to as “de minimis” shipments. Specifically, effective May 2, 2025, importers will no longer be permitted to claim the duty-free de minimis exemption on shipments into the United States that are products of China or Hong Kong through commercial channels. Such shipments will be required to pay all applicable duties, taxes, and fees in accordance with customs laws.
For shipments through postal channels, the elimination of the use of the de minimis exemption applies to products from China or Hong Kong. For such shipments, carriers (e.g., commercial airlines) will be required to collect and remit to CBP through the selection of one of two collection methods: (1) thirty percent of the value of the shipment, or (2) a flat rate of $25 per postal item after May 2, 2025 (increasing to $50 per postal item starting June 1, 2025).
While the elimination of the de minimis exception is currently limited to shipments relating to products of or from China and Hong Kong, another Executive Order issued yesterday on “reciprocal tariffs” indicated that the administration intends to eliminate the de minimis exemption on all shipments as soon as it is able to do so.
The impacts of the de minimis EO will be felt across e-commerce, in particular, but also creates an unprecedented regime of requiring carriers to collect duties on behalf of the U.S. government under certain circumstances.
Background
Since the 1930s, Congress has authorized administrative exemptions from duties when the amount of revenue to be collected is disproportionate to the expense and inconvenience caused to the government. One such exemption from the payment of duties was for low-value shipments. Prior to 2016, the threshold for claiming the exemption was when the value of the merchandise imported was $200 or less and, accordingly, the use of the exemption was not significant. In 2016, however, the Congress increased the exemption threshold to shipments valued at $800 or less. According to U.S. Customs and Border Protection (CBP), since that time the number of de minimis shipments increased from approximately 139 million a year to over one billion shipments a year.
CBP’s ability to effectively enforce U.S. trade laws and, in particular, interdict illicit goods such as fentanyl given the sheer volume of de minimis imports, has been an enormous challenge for the agency. In February 2025, when President Trump initially imposed increased duties on Canada, China, and Mexico to address concerns regarding illicit drugs and the synthetic opioid supply chain, the Executive Orders stated that de minimis treatment would not be permitted for goods governed by the increased duties — namely goods imported from Canada, China, and Mexico (unless they were USMCA eligible).
Shortly thereafter, however, the President suspended the elimination of duty-free treatment of de minimis imports and made the exception available again until the Secretary of Commerce notified the President that “adequate systems are in place to fully and expediently process and collect tariff revenue applicable” to what would otherwise be duty free de minimis shipments. In short, there was concern by the government that the entry of formerly de minimis shipments would crash the Automated Commercial Environment (ACE) system through which the trade community reports imports and exports and the government determines admissibility.
Commercial Shipments
For shipments through commercial channels, importers will be required to pay all applicable duties, taxes, and fees in accordance with customs laws. This includes any Most Favored Nation duties, Section 201 duties, Section 232 duties, Section 301 duties, antidumping and countervailing duties, as well as the reciprocal and baseline tariff duties announced yesterday.
In practical terms, the elimination of the de minimis exception will also require importers to submit substantially more advanced data to CBP on each shipment that will allow CBP to identify and interdict more illicit shipments.
The impact on e-commerce that has built up over the last decade as a result of the $800 or less de minimis threshold will be staggering. Many businesses, including those that operate on e-commerce platforms, utilize the de minimis exception to remain competitive. The duties that will be owed on these goods as a result of the recent tariff actions taken by this administration will increase the cost of such shipments. Additionally, the increase in the data reporting requirements to CBP on each shipment as a result of the elimination of the exception may significantly impact the low-cost supply chains that have been created due to the increase in e-commerce over the last decade. Whether the e-commerce model will be able to survive the elimination of the de minimis exception remains to be seen.
International Postal Packages
For international postal packages from China and Hong Kong, the EO makes the unprecedented move of requiring carriers to collect duties on behalf of CBP and remit them to the agency. Because the EO makes the elimination of the de minimis exemption applicable to anything “from” China and Hong Kong, it also applies to goods that are not necessarily products “of” China and Hong Kong — meaning it applies to products that were not produced entirely, or substantially transformed in, China or Hong Kong.
International post has long been an area of concern for the U.S. Government because of the inherent problems associated with data collection and the integrity of such data from foreign postal services. In 2018, Congress passed the Synthetics Trafficking and Overdose Prevention (STOP) Act, which required all postal packages entering the U.S. from international posts to provide Advance Electronic Data (AED) by January 1, 2021. In the absence of AED, the U.S. Postal Service (USPS) was expected to not allow the postal parcels to enter the United States or to take remedial action. By way of comparison, commercial shipments through express consignment carriers (e.g., FedEx and UPS) have been required to submit AED to CBP since the Trade Act of 2002.
To date, the USPS has not been able to comply with the STOP Act, in part, because of data collection issues from foreign postal services and the inherent nature of international postal processes. The USPS does not have any contact or connection with, or jurisdiction over, the foreign sender through which to enforce the collection of the data or duties. Mail shipments usually include a person who will pack up goods in a box, arrive at a foreign post office that many times will take hand-written data, and then the goods will ship by carrier to one of the five international service centers in the United States where it is scanned for radiation. USPS then presents inbound items to CBP, which can request “holds” on particular packages the agency wants to inspect based on risk factors. CBP then clears inbound items and routes them back to USPS, and USPS enters the packages into the domestic mail for delivery.
Within this framework, if CBP were to require an adjustment to duties, for example, the USPS would be unable to enforce that adjustment against the person who packed up the box in the foreign country. Accordingly, this new EO essentially waives any applicable duties (e.g., IEEPA, Section 301s, reciprocal, etc.) and is requiring carriers to select a method by which they are going to collect duties on shipments. The carrier’s method must be consistent in a given month across all shipments, but they can change the method once a month or on such other periodic timeframe as CBP determines appropriate. The methods made available by the EO is either: (1) thirty percent of the value of the shipment, or (2) a flat rate of $25 per postal item after May 2, 2025 (increasing to $50 per postal item starting June 1, 2025).
Additionally, the carriers must have an international carrier bond to ensure CBP’s enforcement of the carrier’s payment of the duties to CBP. The carriers can remit the collected payments to CBP monthly or on another periodic basis as allowed by CBP. CBP may require carriers to verify the total number and value of individual postal items through ACE. CBP retains the discretion to require formal entry for any international postal package, which will result in the applicable duties, taxes, and fees required by law rather than the carrier-collected fees described above.
The burden placed on carriers through this EO is unprecedented. While carriers have always been an integral part of the U.S. trading system, CBP has been the collector of duties, taxes, and fees from importers. Carriers have previously had many obligations to CBP, such as the provision of correct manifest data (e.g., correctly identifying what goods they are transporting), but never the collection of duties. Depending on how carriers respond to this challenge, this administration could begin to see private carriers as important partners in the collection of revenue for the U.S. Government.
Conclusion
The EO’s elimination of the duty-free de minimis exception for shipments for products of and from China and Hong Kong will be a test case of sorts for expanding this elimination further in the future. Yesterday’s actions alone will likely shake up e-commerce significantly and consumers may see prices increase accordingly. Also at stake as a result of the EO is the role of carriers in the U.S. Government’s ability to enforce customs laws in the international postal environment.
Further, the additional data collection required as a result of the elimination of the de minimis exception will provide CBP with more robust information to take enforcement action against noncompliant shipments at the time of entry. Ensuring that effected shipments and the information provided for them are compliant with the new requirements will be crucial for all parties to avoid any future enforcement actions that might be taken by CBP.
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Cassidy Levy Kent’s attorneys, compliance professionals, economists, and licensed customs brokers are particularly adept at guiding clients through the constantly and quickly changing trade landscape. Our team works with companies to develop and execute creative and effective solutions to trade issues that make sense for their business. We will continue to provide updates. Please contact us with any questions.