The duty-free de minimis treatment this post described when it was published in 2022 was suspended for goods from every country on August 29, 2025, and Congress has repealed it for commercial shipments effective July 1, 2027. The sections below have been rewritten to reflect the current rules. Sources are linked inline.
To say that eCommerce has changed over the past two years would be the understatement of the decade. As people around the world embraced social distancing and obeyed stay-at-home orders, they turned to online shopping more than ever before.
Prior to the pandemic, merchants who imported goods from overseas were already feeling the pressure of the increased tariffs imposed starting in 2018. Merchants, and by extension, consumers, were projected to feel the pinch of increased product costs due to higher tariffs being imposed as the products cross the US borders.
Then the pandemic happened. eCommerce sales jumped nearly 32% in 2020 compared to the prior year according to US Census Bureau data. In 2021, revenue from retail eCommerce in the U.S. was estimated at roughly $768 billion, a huge jump from pre-pandemic 2019’s $516.5 billion.
As eCommerce growth began to surge amid the pandemic, merchants simultaneously began to struggle to keep up with supply chain constraints and still meet consumer demand. Delays, material shortages, higher freight costs, and widespread labor shortages have created a perfect storm that’s impacted the supply chain around the world.
Some might argue that the pandemic set off a domino-effect of issues throughout the supply chain. Shutdowns at manufacturing plants and factories led to stock shortages. Once manufacturing resumed, companies clamored to find shipping containers and were forced to pay premiums to secure them. In ports around the world, cargo ship “traffic jams” ensued with labor shortages and lack of space for container unloading. Once cargo was removed from ships, carrier delays created further disruption to the delivery of goods.
In short: it hasn’t been easy. Meeting consumer demand and navigating the complexities and challenges of the global supply chain has required patience, persistence, and creativity.
Add to all of this the rising costs of materials and simply doing business, and it’s easy to see why many merchants are looking for ways to alleviate supply chain woes and find ways to save money.
For years, one of the tools merchants reached for was Section 321, the duty-free de minimis entry for shipments valued at $800 or less. That tool is gone. Read on for what Section 321 was, what replaced it, and what importers should do now.
Table of Contents
What is Section 321?
Orders shipped from outside the United States direct to buyers are subject to import duties, taxes and fees. Until August 29, 2025, one way merchants kept those costs down was the de minimis administrative exemption in US Customs and Border Protection (CBP) law, better known as Section 321.
Section 321 refers to 19 U.S.C. 1321, the statute that let CBP admit low-value shipments free of duty and tax. Under subsection (a)(2)(C), articles with an aggregate fair retail value of $800 or less, imported by one person on one day, could enter without duties and with far less paperwork than a normal entry.
CBP described the exemption this way: “De minimis provides admission of articles free of duty and of any tax imposed on or by reason of importation, but the aggregate fair retail value in the country of shipment of articles imported by one person on one day and exempted from the payment of duty shall not exceed $800.”
That exemption no longer applies to commercial shipments. Executive Order 14324, signed July 30, 2025, suspended duty-free de minimis treatment for goods from every country effective 12:01 a.m. Eastern on August 29, 2025. CBP’s implementing notice was published at 90 FR 42418. Goods from China and Hong Kong had already lost the exemption on May 2, 2025.
How the exemption worked, and what applies now
Section 321 let shipments with a retail value of $800 or less clear customs without duties under a simplified release. That $800 figure was the de minimis threshold.
Wondering what the heck de minimis means? It’s a common law term, latin in origin, which means “too trivial or minor to merit consideration”. As it relates to eCommerce, the de minimis threshold dictated what was and wasn’t significant enough in retail value to be subject to import fees.
The threshold was raised from $200 to $800 by the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA), taking effect in 2016. For almost a decade, goods under $800 could be imported into the US with less paperwork and no duties, which cut international shipping costs and sped up cross-border delivery. Many of those shipments moved through an electronic release CBP called entry type 86.
Here is what applies now:
- Every commercial shipment valued at $800 or less, from any country and by any mode of transport, is subject to all applicable duties, taxes and fees, and must be filed as a formal or informal entry in CBP’s Automated Commercial Environment (ACE) by a party qualified to make entry (CBP fact sheet; CBP FAQ).
- Entry type 86 is no longer accepted. ACE rejects type 86 cargo release transactions (CBP CSMS #66065494).
- Postal shipments are no longer duty-free either. CBP’s new mail informal entry process for shipments valued at $2,500 or less took effect July 24, 2026 (CBP FAQ; 91 FR, June 24, 2026).
- The suspension is indefinite. CBP wrote it into its regulations by interim final rule on June 24, 2026 (91 FR 37789).
- It also ends by statute. The One Big Beautiful Bill Act (Public Law 119-21, section 70531) repeals the de minimis privilege for commercial shipments effective July 1, 2027. The exemption is scheduled to end regardless of what happens to the executive orders (19 U.S.C. 1321, amendment notes).
- Two narrow exemptions remain: bona fide gifts (19 U.S.C. 1321(a)(2)(A)) and personal or household articles accompanying travelers (19 U.S.C. 1321(a)(2)(B)) (CBP FAQ). Neither covers goods you sell.
What about importing from China?
The US-China trade war added Section 301 tariffs on Chinese imports starting in 2018, and the extra duty landed on US merchants who source there.
For years, Section 321 was the way around them, because a de minimis entry paid no Section 301 duty. That route closed first for China and Hong Kong, whose goods lost de minimis treatment on May 2, 2025, and then for every country on August 29, 2025 (91 FR 37789). A parcel from China now pays whatever duties apply to its tariff classification and country of origin, whatever its value.
What Section 321 used to offer
Section 321 kept logistics costs down for merchants who shipped small parcels into the US. Here is what it offered, for the record.
Lower costs overall
Section 321 made it cheaper to manufacture overseas and ship direct to US buyers duty-free and tax-free. That included China, as long as the parcel came in under the threshold.
Faster shipments
Section 321 reduced the paperwork needed to clear the border. Parcels cleared faster and were rarely held at customs. Today every one of those parcels needs an entry filed, which is why fulfilling from inventory already inside the US has become the faster path.
Gives you a leg-up on the competition
Saving on international shipping let brands launch into the US more affordably and offer better shipping rates. That advantage is gone for everyone at once, which also means competitors who built their model on it face the same reset.
What replaces the Section 321 playbook
The Section 321 model was simple: hold inventory in a hub just outside the US, in Mexico, Canada, Shenzhen or Hong Kong, and ship each order across the border as a parcel under $800. Now that every parcel pays duty and needs an entry, the economics run the other way. Three options replace it:
- Import in bulk under a formal entry and fulfill from US inventory. You pay the duty once, on a consolidated shipment, and every order ships domestically. This is where knowing your landed cost per SKU matters, because the duty now sits in your unit cost instead of disappearing at the parcel level.
- Defer duty with bonded warehouses. Goods sit inside the US without duty until they are withdrawn for sale, which protects cash flow and lets you re-export without paying US duty at all.
- Keep a cross-border hub for speed, not savings. A Mexico or Canada 3PL can still be close to your customers and your factories, but each shipment now needs a customs broker or entry filer and pays duty on entry.
Hub locations still follow the same logic. You can establish warehouses and fulfillment hubs:
- Closer to your manufacturers
- Closer to your parts suppliers (ie if you have custom boxes and packaging goods)
- In countries with more manpower available
- In countries with less port congestion
- In locations just outside the US borders (ex., Mexico or Canada)
Where cross-border hubs still fit
A merchant can still contract a 3PL in Shenzhen, Hong Kong, Tecate or across Canada and route orders there. What changed is the border step. The warehouse packs the order and labels it with its tariff classification and value as before, but the parcel now enters under a formal or informal entry, duty is assessed on it, and someone qualified to make entry has to file. Maquiladora warehouses in Mexico that operate as US companies with US return addresses still shorten delivery times, and they still carry their own licensing requirements.
Hubs near the Chinese manufacturing belt still avoid the cost and lead time of ocean containers for fast-moving SKUs, but the parcel no longer arrives duty-free. The comparison is now air freight per unit plus duty against ocean freight plus duty, not against zero.
Whichever model you land on, the order, inventory and cost data has to move cleanly between your storefront, the fulfillment location and your ERP. That is where Pipe17 helps: it connects, syncs and automates your order operations so inventory and fulfillment status stay consistent across systems while your import model changes underneath them.
Special Considerations
The suspension covers merchandise, not people. Bona fide gifts and travelers’ personal articles keep their own exemptions (CBP FAQ). Donations and informational materials covered by 50 U.S.C. 1702(b) also stay duty-free (CBP fact sheet).
Other countries set their own de minimis thresholds, and nothing in the US action changes them. If you sell into the UK, the EU, Canada or Australia, the rules for parcels entering those markets are unaffected.
Remember:
- Check how your parcels are being filed today. Anything still moving as an $800-or-under “de minimis” shipment is being entered formally or informally and paying duty, whether or not your landed-cost model reflects it.
- Confirm who is making entry and collecting duty for you: your carrier, your broker, or a qualified party filing on your behalf.
- Watch the CBP e-commerce FAQ page for changes; the postal informal entry process is new as of July 2026 and the statutory repeal lands July 1, 2027.
Conclusion: plan for duties on every shipment
Finding an edge in your supply chain still matters. The edge is no longer a duty exemption. It is knowing your true landed cost, choosing where inventory sits so duty is paid once and deferred where it can be, and running order operations that keep every system in step while the rules change. With the right partner in place, merchants can absorb the end of de minimis without absorbing the chaos.
