Along with recent changes to U.S. tariffs, there’s been talk about changes to the de minimis exemption that allows tax-free imports of goods worth up to $800.

How does de minimis work, and what will it mean for businesses if the rule is changed? Kate Muth, executive director of the International Mailers Advisory Group (IMAG), weighs in.

Kate explains, “De minimis is the value under which goods can come into the U.S. free of duties and without having to [go] through the formal entry process.”

The de minimis threshold for U.S. imports is higher than many other countries: $800.

While people often talk about the “de minimis loophole,” Kate clarifies that de minimis isn’t a loophole. “It's actually a core U.S. trade policy. … It's based on sound economic underpinnings that goods can be shipped quickly and affordably. You know, they can have a streamlined process for entry. And that benefits U.S. businesses.”

When the Trump administration announced tariffs against Mexico, China, and Canada, they also announced that the de minimis exemption was going away. But as Kate explains, the abrupt change caused a lot of issues.

“[It happened] way too suddenly. It overwhelmed CBP. … The Postal Service briefly said [they weren’t] going to take anything from China or Hong Kong, because [they don’t] have a mechanism to collect duties and taxes.”

The result?

“The president came out with an updated executive order and said, we will reinstate de minimis exemption until an effective mechanism for collecting the duties and taxes can be in place. … So we're still in that period [where] de minimis is allowed.”

While larger organizations will be able to adjust to de minimis changes and new tariffs, small businesses are likely to struggle.

As Kate notes, “If you're a big retailer like Walmart, you have the leverage to lean on your suppliers to demand that they eat some of that cost of the tariff. But that just means that the supplier is going to seek [to recover] that cost … somewhere else. And that's usually the small and mid-sized business.”

• Connect with Kate on LinkedIn: https://www.linkedin.com/in/kate-muth-76b5a7165/
• Visit IMAG’s website: https://www.internationalmailers.net/
• Comment on the proposed rule “Trade and National Security Actions and Low-Value Shipments” (deadline March 24): https://www.federalregister.gov/documents/2025/01/21/2025-01074/trade-and-national-security-actions-and-low-value-shipments
• View the proposed rule “Entry of Low-Value Shipments”: https://www.federalregister.gov/documents/2025/01/14/2025-00551/entry-of-low-value-shipments