What is De Minimis // How Does De Minimis Affect E-Commerce and Product Sourcing in 2025
In global trade, the term de minimis refers to the minimum value of imported goods exempt from customs duties and taxes. This threshold varies by country and plays a significant role in e-commerce, product sourcing, and cross-border trade. De minimis exemptions allow businesses and consumers to receive low-value shipments without additional import duties, making international trade more efficient and cost-effective.
However, as global trade policies shift, governments are increasingly reevaluating de minimis thresholds, particularly in response to the rise of e-commerce platforms like Shein, Temu, and AliExpress. These platforms leverage these exemptions to ship products directly to consumers at cheap prices.
This article explores the latest developments in de minimis policies, how they impact product sourcing and e-commerce, and how businesses can adapt to these changes.
Update: there is now a pause on the de minimus until the CBP can put in place means to collect it at scale: https://www.whitehouse.gov/presidential-actions/2025/02/amendment-to-duties-addressing-the-synthetic-opioid-supply-chain-in-the-peoples-republic-of-china/
What Does De Minimis Mean?
De minimis is a trade policy concept that establishes a threshold below which imported goods are exempted from customs duties and taxes. This threshold varies by country and determines when an imported package requires formal customs clearance and duty payments. The de minimis rules streamline low-value shipments, reduce customs authorities' administrative burdens, and expedite trade.
De minimis is crucial in determining cost structures and logistics strategies for e-commerce businesses and product sourcing specialists. Companies that rely on cross-border shipping can leverage de minimis thresholds to minimize import costs and enhance delivery speeds. However, recent regulatory changes in key markets are reshaping the landscape of duty-free shipping.
The Role of De Minimis in E-Commerce and Product Sourcing
De minimis has been a key advantage for e-commerce retailers, drop shippers, and sourcing companies for years. It allows small packages to move across borders with minimal costs. Lower import costs make products cheaper for consumers, while faster shipping due to reduced customs clearance requirements enhances customer satisfaction. Additionally, companies sourcing from manufacturers in China, Vietnam, and other countries can ship small quantities of goods directly to customers without significant tariffs, giving foreign sellers an edge over local retailers who must charge taxes.
While these advantages have fueled the growth of cross-border e-commerce, recent regulatory changes in major markets like the U.S. and the EU signal a shift away from unrestricted duty-free imports.
Recent Changes in De Minimis Regulations (2025 Update)
United States: Proposed Changes to the De Minimis Exemption
The U.S. Customs and Border Protection (CBP) has proposed changes to the de minimis exemption. The Notice of Proposed Rulemaking (NPRM) suggests that shipments valued at $800 or less and covered by Section 201, Section 232, or Section 301 tariffs would be ineligible for the de minimis exemption. This proposal is currently under public comment and has not yet been finalized.
This change significantly impacts platforms like Shein and Temu, which previously used the U.S. de minimis threshold of $800 to ship low-cost goods directly to American consumers, avoiding tariffs. If implemented, all shipments from China covered under these tariff sections would face duties, increasing costs for businesses sourcing from China. As a result, many sellers may shift sourcing strategies toward alternative suppliers in Vietnam, India, or domestic U.S. production to remain competitive.
European Union: No More VAT Exemption for Low-Value Goods
Since July 2021, the European Union eliminated its de minimis VAT exemption, meaning all imports are now subject to VAT, regardless of value. This change disrupted cross-border sales from China, forcing sellers to collect VAT at the point of sale or risk delayed deliveries.
Sellers using dropshipping from China to the EU now face higher compliance costs and additional paperwork. Many companies have shifted to fulfillment centers in the EU to avoid customs complications. However, this change has benefited brands with higher-value products, as it reduces the competitive advantage of ultra-low-cost competitors.
United Kingdom: Calls to Close the De Minimis “Loophole”
Following the U.S. crackdown on de minimis, major UK retailers are urging the British government to end tax exemptions for Chinese e-commerce giants. While the UK has yet to implement official changes, there is growing pressure to follow the U.S. example and eliminate tax-free imports from China.
If implemented, these changes could level the playing field for UK retailers while requiring e-commerce sellers to explore local fulfillment options to remain competitive.
How Businesses Can Adapt to Changing De Minimis Policies
With de minimis exemptions being removed or reduced in key markets, businesses sourcing and selling internationally must adjust their strategies.
One of the most important steps is to diversify sourcing beyond China. The U.S. and EU are tightening trade restrictions with China, making it critical to explore alternative manufacturing hubs like Vietnam, which has a growing supplier base for textiles, electronics, and furniture; India, known for strong production in leather goods, apparel, and home decor; and Mexico, which offers nearshoring advantages for U.S. importers.
Another approach is to use local fulfillment centers to avoid customs duties and VAT on cross-border shipments. Businesses should consider warehousing inventory in the U.S. and EU to ensure faster delivery, leveraging Amazon FBA or third-party logistics (3PL) providers to handle regional distribution, and partnering with fulfillment centers in target markets to reduce reliance on direct imports.
Adjusting pricing strategies is also crucial. With tariffs and VAT now affecting more shipments, businesses should factor in added costs when setting prices to maintain profitability. They should also use dynamic pricing models that adapt to changing import costs and offer bulk shipping options to customers to consolidate orders and lower per-unit costs.
Trade policies are constantly evolving, so businesses must stay ahead of regulatory changes. Monitoring government updates on de minimis thresholds, working with customs brokers to ensure compliance with import regulations, and educating customers about potential tax implications can help businesses navigate this changing landscape more effectively.
Final Thoughts // De Minimis Changes in 2025
The de minimis exemption has been a cornerstone of global e-commerce, enabling businesses to ship products internationally with minimal costs. However, the era of unlimited duty-free imports is ending with major economies like the U.S., EU, and UK tightening regulations.
E-commerce businesses and product sourcing specialists must adapt by diversifying supply chains, using local fulfillment centers, and refining pricing strategies. While these changes introduce new challenges, they also create opportunities for businesses that can effectively navigate regulatory shifts.
As global trade policies evolve, staying informed and proactive will be the key to maintaining a competitive edge in international e-commerce.
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