What is De Minimis? US End and What Replaces It

The US de minimis threshold under Section 321 of the Tariff Act of 1930 (codified at 19 USC 1321(a)(2)(C)) lets shipments under 800 USD enter the US duty-free, tax-free, with minimal documentation. The threshold transformed cross-border e-commerce after 2016 when it was raised from 200 USD, enabling Chinese e-commerce platforms like Shein and Temu to ship billions of low-value parcels directly to US consumers each year.

In 2025 the situation changed dramatically. An executive order ended the de minimis benefit for goods of Chinese origin. The order took effect mid-2025 after some implementation back-and-forth and remains in force in 2026. For non-China origin goods, de minimis continues. For Chinese origin goods, every shipment regardless of value is subject to formal entry, duty, and the full Section 301 plus Section 122 stack.

Section 321 in legal terms

19 USC 1321(a)(2)(C) provides:

"The Secretary of the Treasury... may prescribe regulations... admitting articles free of duty and 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 USD in the case of articles described in clause (iii)."

Key features:

• 800 USD threshold in the fair retail value at the country of shipment.
• Per person per day: aggregated to a single recipient on a single day.
• Tax and duty exemption: full exemption from federal duties and taxes.

CBP implementing regulations (19 CFR 10.151) provide the operational rules: typically Type 86 entries for de minimis with informational reporting, or release without formal entry under release order.

The 2025 China exclusion

The 2025 executive order found:

• Approximately 1 billion de minimis parcels per year from China.
• The volume exceeded CBP's inspection capacity, allowing illicit drugs, counterfeits, IP-infringing goods, and Section 301-evading commercial shipments to slip through.
• The benefit was undermining US Section 301 enforcement (China-specific tariffs were waived simply by shipping in 799 USD increments).

The order excluded China-origin goods from Section 321. As of mid-2025 every shipment of Chinese origin must:

• Be formally entered (Type 01) if value exceeds 2,500 USD.
• Be filed as informal entry (Type 11) if value is between 800 USD and 2,500 USD.
• Be filed as Type 86 or formal entry (per CBP guidance) even below 800 USD; no de minimis exemption.

Duty, MPF, Section 301, Section 122 all apply.

What it meant for Chinese ecommerce

The economics flipped overnight in 2025:

• A 50 USD T-shirt from Shein: previously zero duty. Now: 16.5 percent MFN + 7.5 percent List 4A + 15 percent Section 122 = roughly 40 percent total duty (assuming Section 122 not yet in effect; from Feb 2026 add another 15 percent). On a 50 USD product, roughly 12 to 20 USD in duty plus broker fee of 7 to 20 USD per parcel.
• The carrier brokerage fee: parcel carriers (USPS, DHL, FedEx, UPS) charge for the new entry handling. Even for a 25 USD product, the broker fee can be 5 to 10 USD.

Shein, Temu, and AliExpress responded with:

1. US fulfillment centers: hold inventory in US warehouses; ship as domestic. Avoids the entry but moves cost to inventory carry.
2. Consolidated shipping: ship 5,000 parcels together as a single commercial entry, then re-distribute domestically. Reduces per-parcel friction but adds last-mile complexity.
3. Origin diversion to Vietnam, Cambodia, Mexico: substantial transformation in non-China locations to avoid both Section 301 and the China-specific exclusion.

Non-China de minimis still works

For all non-China origin goods, the 800 USD threshold remains in force. A consignee can receive multiple consignments per day, but the aggregate must not exceed 800 USD for the duty-free benefit. CBP can require formal entry for any de minimis shipment they choose to scrutinize.

Common non-China de minimis flows:

• Personal purchases from European specialty retailers
• Mexican craft goods shipped DDP via Mexican freight forwarders
• Vietnamese coffee subscriptions
• Indian saree and jewelry orders

The friction remains low for non-China origin.

EU equivalent: IOSS

The EU's equivalent threshold structure since July 2021:

• Duty exemption for goods under 150 EUR.
• No VAT exemption: VAT applies from the first euro.
• IOSS (Import One-Stop Shop): the platform allows non-EU sellers to register once for VAT and collect it at the point of sale, transmitting it to the relevant member state monthly. Eligible only for B2C shipments under 150 EUR.

For sellers shipping to EU consumers below 150 EUR, IOSS is the workflow. Sellers register in any EU member state (often Ireland or the Netherlands for English-language ease), collect VAT at the rate of the buyer's country, file a single monthly return.

For shipments above 150 EUR, normal customs duty applies plus VAT.

UK de minimis

The UK removed the low-value consignment relief in January 2021. Now:

• VAT applies from the first GBP on imports.
• Duty exemption for goods under 135 GBP; above 135 GBP duty applies.
• The seller collects VAT at point of sale for goods under 135 GBP using a VAT registration; for higher-value goods VAT is paid at import.

The UK system parallels the EU IOSS but with a higher threshold for duty (135 GBP vs 150 EUR) and a slightly different operational model.

Other countries' thresholds

Thresholds change. Verify current values for any jurisdiction before structuring an e-commerce flow.

How the calculator handles de minimis

When you enter a low-value shipment in the calculator, the engine:

1. Checks if the value plus origin combination qualifies for de minimis in the destination country.
2. For US: confirms non-China origin and value under 800 USD.
3. For EU/UK: applies the duty exemption under threshold but computes VAT.
4. Flags the new entry requirements for excluded origins (China for US).
5. Estimates broker/carrier fees that often dominate the cost on low-value shipments.

Strategy for e-commerce sellers

• For US-bound under 800 USD: source non-China origin where possible.
• For US-bound from China: bulk-consolidate; use US fulfillment.
• For EU-bound: register IOSS and collect VAT at checkout for under-150-EUR items.
• For UK-bound: register for UK VAT and collect at checkout for under-135-GBP items.

Related guides

• Calculate Import Duty: China to USA
• What is Section 122? The 2026 Reciprocal Tariff Explained
• Incoterms 2020 vs Landed Cost: A Clear Guide
• Commercial Invoice vs Packing List vs BoL
• What Is a Customs Broker and When Do You Need One
• Section 232 vs 301 vs 122: How US Tariffs Stack in 2026

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