On August 29, 2025, the U.S. will officially end its de minimis exemption for all countries. Overnight, the trade provision that allowed low-value imports under $800 to enter duty-free will disappear -- and every shipment, regardless of value, will face full customs clearance and applicable duties.
Read also: The Rules Have Changed: How to Future-Proof Your U.S. Ecommerce Strategy Before Peak Season
For global ecommerce brands, this is a seismic shift. It's not just a new cost line in your P&L -- it's an operational, compliance, and customer experience reset. And with tariffs stacking on certain origins, the financial impact can be significant.
According to Passport's 2025 Peak Season Playbook study with Drive Research, 99% of ecommerce leaders say tariffs and trade shifts are already impacting their Q4 planning. In the same survey, 96% expect global order volume to increase this peak season -- meaning these changes will hit during what's projected to be one of the busiest international holiday periods in recent years.
Why This Change Matters
For years, de minimis made direct-to-consumer (DTC) cross-border shipping to the U.S. simple, cheap, and fast. Brands could fulfill orders from overseas, bypass complex customs filings, and avoid paying duties -- all while offering competitive delivery timelines. Entire ecosystems were built around de minimis with many 3PLs setting up bonded programs in Canada and Mexico to help merchants pre-position inventory and reduce delivery times.
That era is over.
Now, every parcel needs a full customs entry, accurate classification, a designated Importer of Record (IOR), and payment of duties and fees. U.S. Customs and Border Protection (CBP) has ramped up enforcement, with audits up more than 150% year-over-year. Undervaluation, misclassification, and transshipping or "origin washing" (routing goods through other countries to disguise origin) are all in the crosshairs.
For brands relying heavily on low-value, China-made products, this is a double hit: de minimis is gone and layered tariffs can push landed costs up by 30% to 100%.
The Impact on Ecommerce Brands 1. Pricing Pressure and Margin Erosion
Tariffs are now unavoidable. A $100 retail item that once entered duty-free could face $20-$40 in duties -- before broker fees or clearance costs. That's why, according to our survey, 7 in 8 brands say they're raising prices just to offset the impact of tariffs.
Quick win: Model your new landed costs by SKU and identify products that remain viable under the new duty regime.
2. Operational Complexity
Every shipment needs compliant paperwork, a proper HTS code, and an IOR. Without U.S. infrastructure, brands may face customs holds, unexpected fees, and delivery delays. 69% of ecommerce leaders admit they argmn't extremely confident in their team's ability to manage cross-border fulfillment this peak season.
Quick win: Evaluate whether a domestic fulfillment model -- even partial -- could simplify logistics, speed up delivery, and reduce per-order costs.
3. Compliance Risk
Customs penalties can now far exceed the duties themselves. Under the False Claims Act, knowingly undervaluing goods can result in triple damages and civil fines.
Quick win: Work with U.S. licensed customs brokers to ensure that commercial invoice level detail is accurate and compliant.
5 Moves to Make Now
Drawing on strategies we've implemented for leading global brands, here's how to adapt without losing momentum.
1. Rethink Your Fulfillment Model
Under de minimis, shipping directly to U.S. consumers made sense. Now, importing in bulk and fulfilling domestically often yields lower effective duty rates, faster delivery, and better returns management.
In-Country Enablement -- where you bulk-import inventory into a U.S. warehouse or 3PL and fulfill orders locally -- is one of the fastest ways to protect margins. Duties are calculated on manufacturing cost rather than retail price, often cutting the effective duty rate in half or more.
It's also what high-growth brands are already prioritizing: according to our spring survey, 94% of ecommerce leaders plan to scale in-country fulfillment in the next five years.
2. Get Pricing Strategy Right
Transparent, duty-inclusive pricing can prevent cart abandonment, but the best model will depend on your products and price points. Test different approaches -- from incorporating duties into retail prices to showing them clearly at checkout.
Avoid the "surprise fee" moment on delivery, which often leads to returns and customer churn.
3. Leverage Duty Drawback
If you re-export goods -- whether unsold inventory or customer returns -- you may be able to recover up to 99% of the duties and fees you paid through duty drawback.
This is especially relevant for brands with high returns or multiple fulfillment locations, a reality for 1 in 3 ecommerce leaders who say lowering failed deliveries and returns is a top partner priority.
4. Audit Classifications and Explore Tariff Engineering
Make sure your HS codes are correct and complete. Even a minor misclassification can trigger penalties. HS codes change, so check with a licensed customs broker to ensure you are using the correct but optimal commodity code.
Some brands are reducing duty rates by modifying product design, materials, or assembly locations -- a legal approach known as tariff engineering that large retailers have used for decades.
5. Invest in Compliance as a Competitive Advantage
In this environment, "playing by the rules" isn't just about avoiding trouble -- it's a market differentiator. 46% of ecommerce leaders say fast, reliable delivery is the top trait they look for in a global partner, and compliance is foundational to delivering on that promise.
Build compliance into your marketing story: reliability and transparency can be as powerful as speed or price.
The U.S. Market Is Still Worth It
It's tempting to view these changes as a reason to pull back from the U.S. -- but that would be short-sighted. The U.S. remains the world's largest ecommerce market, and brands that adapt now will be positioned to capture share as less-prepared competitors stumble.
We've seen brands make the shift in weeks, not months, and enter peak season with stronger operations and happier customers than before. The key is moving fast and choosing the right strategy for your stage, category, and capital.
Your Immediate Checklist Run the numbers: Recalculate landed costs under new duty rates. Pick your model: DTC, In-Country Enablement, or a hybrid. Secure a partner: Work with licensed brokers and compliance experts. Plan your messaging: Be transparent with customers about changes. Stay agile: Build a playbook that can adapt as tariffs and rules evolve.
Final Word: De minimis may be gone, but growth in the U.S. is still within reach. With a proactive, compliant, and customer-first approach, you can navigate the turbulence -- and even use it to your advantage.
Author Bio
Thomas Taggart is VP of Global Trade at Passport, a leading global ecommerce solutions provider helping brands like Ridge, HexClad, and Wildflower Cases scale globally with cross-border shipping, expert compliance support, and in-country enablement services. To learn more about Passport, visit passportglobal.com. The Global Entry with Thomas Taggart is a new bi-weekly column in Global Trade Magazine covering the strategies, regulations, and insights shaping the future of cross-border commerce.