De Minimis Is Gone: What Small Sellers Now Pay

A box of inventory you have imported a dozen times without incident sits at customs. There is a bill attached to it. The goods cost you $400 and the bill is for $216.

Nothing about your order changed. The rule did. The de minimis exemption, which let shipments worth up to $800 enter the United States without tariffs, no longer exists. This is the first full year in which essentially every parcel from every country is dutiable regardless of what it is worth.

For a small seller importing in small quantities, that single change can be larger than your entire margin on a shipment. And a second charge arrives on top of it before November.

What follows is exactly what replaced the exemption, the three separate charges that can now land on one parcel, the peak season surcharges stacking behind them, and the margin arithmetic on a typical order.

What De Minimis Was, and What Replaced It

De minimis is a customs concept, not a tax break anyone lobbied for. The idea was administrative: below a certain value, the cost of assessing and collecting duty exceeds the duty itself, so the parcel passes free.

The US threshold was $800, high by international standards. It is what made direct-from-overseas retail work, and it is what let a small seller order inventory in parcel-sized batches without a customs broker.

The exemption was removed for China and Hong Kong in 2025, then suspended for all other countries effective August 29, 2025, with the suspension continued by executive order in February. The practical effect is that value no longer determines treatment. A $40 parcel and a $4,000 pallet are assessed on the same principle.

SmartAsset has a clear breakdown of how the change flows through to consumer prices, and the short version is that it does, almost entirely.

Three Separate Charges Can Hit One Parcel

The complexity is the real cost here, because the rate depends on how the parcel travels, not just where it came from.

For low value shipments from China and Hong Kong moving through the postal system, the choice is between a 54% tariff or a $100 flat fee. The flat fee is better on anything above roughly $185 of declared value and much worse below it. A $60 sample shipment charged $100 is a 167% effective rate.

Parcels carried by commercial carriers follow different rules. Low value packages moving via UPS, FedEx, or DHL are subject to a 30% duty rather than the postal regime. For a seller, this means the carrier you pick is now a tax decision.

And a third charge is arriving. A separate per parcel handling fee on low value postal shipments takes effect no later than November 1, landing precisely as holiday inventory moves.

The American Action Forum's analysis puts the total annual cost to small businesses at between $4.3 billion and $16.3 billion, with a middle estimate near $8.9 billion. Overseas sellers are feeling the same squeeze from the other side, which PBS reported on as the shopping season opened.

Peak Season Stacks Fees on Top

Import duty is the charge you can at least anticipate. The carriers add their own, and the calendar for those is already published.

Amazon's peak surcharges apply across three windows: October 25 to November 21, November 22 to December 26, and December 27 to January 16. Within them, the published increases include:

• Per package demand surcharge rising from 50 cents to 75 cents
• Additional handling fee from $8.75 to $11.90
• Large package fee from $96.25 to $117.50
• Extra heavy package fee from $530 to $590

Read the large and extra heavy lines carefully if you sell anything bulky. A $21.25 increase on a single large package wipes out the margin on a lot of products entirely.

These are the same dynamics that make tariff costs so hard to see in ordinary operations, something we traced through supplier paperwork in how tariff costs reach a business that imports nothing.

The Margin Arithmetic on One Shipment

Abstractions do not help here, so take a concrete order.

You import a $400 parcel of inventory from China through the postal system, and you sell the goods for $800. Previously that parcel entered duty free.

Before:

• Cost of goods: $400
• Duty: $0
• Revenue: $800
• Gross margin: $400

Now, choosing the 54% tariff:

• Cost of goods: $400
• Duty at 54%: $216
• Revenue: $800
• Gross margin: $184

Now, choosing the $100 flat fee:

• Duty: $100
• Gross margin: $300

On this shipment the flat fee is clearly better, saving $116. That flips below about $185 of declared value, where the percentage charge wins. The break-even sits around $185, and knowing which side of it each shipment falls on is now part of the job.

Note what the duty did to the business even in the better case: margin fell from $400 to $300, a 25% reduction, before the handling fee and before any peak surcharge. Survey data shows how firms responded: around 70% report higher costs tied to tariffs, roughly 60% raised prices, and about 80% passed on at least part of the increase while 60% absorbed some of it themselves.

What to Do Before the November Fee

Four actions, all of which can be completed this week.

1. Price the flat fee against the percentage on every inbound shipment. The break-even is near $185 of declared value. Below it, take the percentage. Above it, take the $100. Getting this wrong on a small parcel can cost more than the goods.

2. Consolidate small orders into fewer, larger ones. A flat fee per parcel punishes frequency. Three $150 shipments assessed at $100 each cost $300 in fees. One $450 shipment assessed once costs $100.

3. Compare postal against commercial carriers for each lane. The 30% commercial duty and the postal regime produce different totals at different values, and the cheaper shipping option is not always the cheaper landed cost.

4. Recalculate your landed cost before you set holiday prices. Landed cost means goods plus freight plus duty plus handling plus carrier surcharge. Pricing off the old number through the peak windows is how a profitable quarter turns into a flat one.

If you are weighing where to spend scarce operating cash this quarter, the same discipline applies to technology decisions, which we looked at in how small firms are adopting AI without cutting staff.

Frequently Asked Questions

What is the de minimis exemption and is it really gone?

It allowed shipments valued up to $800 to enter the United States without duty. It was removed for China and Hong Kong in 2025 and suspended for all other countries effective August 29, 2025, with the suspension continued by executive order. This is the first full year in which parcel value does not exempt a shipment from tariffs.

How much duty do I pay on a low value parcel now?

It depends on origin and carrier. Low value postal shipments from China and Hong Kong face either a 54% tariff or a $100 flat fee. Equivalent parcels moving through commercial carriers such as UPS, FedEx, and DHL face a 30% duty.

Should I choose the flat fee or the percentage?

The $100 flat fee beats the 54% rate above roughly $185 of declared value. Below that, the percentage is cheaper. A $60 shipment charged the flat fee carries an effective rate above 160%.

When do holiday shipping surcharges start?

Amazon's peak windows run October 25 to November 21, November 22 to December 26, and December 27 to January 16. The per package demand surcharge rises from 50 cents to 75 cents, and the additional handling fee from $8.75 to $11.90.

How much is this costing small businesses overall?

Estimates of the annual cost of ending de minimis range from $4.3 billion to $16.3 billion, with a mid range figure near $8.9 billion. Around 70% of small firms report higher costs tied to tariffs and roughly 60% have raised prices in response.

Recalculate Before You Reprice

The exemption is not coming back this quarter, and a further fee arrives before November. The businesses that come through this are the ones that know their true landed cost per unit rather than the one in a spreadsheet written when parcels under $800 moved free.

Work out that number for your three best selling products this week. Then decide whether to raise the price, consolidate your inbound shipments, or change carrier, because doing nothing is itself a decision to absorb the whole increase.

The rule changed quietly. Your pricing should not stay quiet about it.

Disclaimer: This article is for general information only and is not legal, tax, or customs advice. Tariff rates, exemptions, and fee schedules are changing frequently and vary by product classification and country of origin. Confirm your own obligations with a licensed customs broker before relying on any figure here.