Key takeaways
President Trump signed an executive order that will end the de minimis customs exception for parcels valued at less than $800.
On July 30, 2025, President Trump signed Executive Order 14324, “Suspending Duty-Free De Minimis Treatment for All Countries,” which will eliminate the de minimis exception that exempted international shipments valued at under $800 from tariffs and most standard customs procedures for all countries except China after August 29, 2025 at 12:01 a.m. eastern daylight time. The de minimis exception for China (including Hong Kong) was separately eliminated by President Trump on May 2, pursuant to Executive Order 14256, “Further Amendment to Duties Addressing the Synthetic Opioid Supply Chain in the People's Republic of China as Applied to Low-Value Imports.”This development came on the heels of a statutory change to the de minimis exception that was enacted in the One Big Beautiful Act (OBBA). In the OBBA, the President is given the authority to eliminate the de minimis exemption starting July 1, 2027. However, whether the Executive Orders 14324 and 14256 could pre-empt the deadline in the OBBA depends on the outcome of a lawsuit is currently before the Court of Appeals for the Federal Circuit (Federal Circuit).
This development came on the heels of a statutory change to the de minimis exception that was enacted in the One Big Beautiful Act (OBBA). In the OBBA, the President is given the authority to eliminate the de minimis exemption starting July 1, 2027. However, whether the Executive Orders 14324 and 14256 could pre-empt the deadline in the OBBA depends on the outcome of a lawsuit is currently before the Court of Appeals for the Federal Circuit (Federal Circuit).
What is the de minimis exception?
The de minimis exception is codified in 19 U.S. Code § 1321(a)(2)(C). The provision aimed to avoid the administrative cost and complexity of clearing and taxing small parcels that are unlikely to yield much customs revenue for the government. Congress last increased the threshold for the de minimis exception to $800 from $200 in 2015, when it passed the U.S. Trade Facilitation and Trade Enforcement Act. Most de minimis shipments have a value that is far below that threshold; the average value of such a package was estimated to be $54 in 2023.
What are the tariff rates that will apply to de minimis packages?
Starting August 29, 2025 at 12:01 a.m. eastern daylight time, previously tariff-exempt de minimis packages, with the exception of international postal shipments, will be subject to the same duties, taxes, fees, exactions, and charges as shipments of any other value. International postal shipments will be subject to either a percentage duty equal to the IEEPA tariff rate of the country of origin, or a flat tariff of $80 (for countries with an effective IEEPA tariff rate less than 16%), $160 (for countries with an effective IEEPA tariff rate between 16-25%, inclusive), or $200 (for countries with an effective IEEPA rate above 25%). These tariffs do not apply to international postal shipments that are personal communications not involving any transfer of anything of value, donations, or informational materials. The tariff rate set by this methodology will also apply to packages and international postal shipments from China (including Hong Kong) starting at that time.
What is controversial about the de minimis exception?
The simplified customs clearance procedures for de minimis shipments – requiring only that a bill of lading be provided – means that the government has little insight on the goods being shipped through this channel. In 2023, a report from U.S. Customs and Border Protection (CBP) admitted that “{w}hile CBP receives some advance electronic data for {de minimis} shipments from carriers, the transmitted data often does not adequately identify the entity causing the shipment to cross the border, the final recipient, or the contents of the package.” As a result, de minimis shipments have been alleged to be a channel for the shipment of illicit goods into the United States.
In addition, more recently Chinese e-commerce giants have become the primary users of the de minimis exception as their popularity exploded among U.S. consumers. The increase in the volume of de minimis shipments have increased along with the popularity of e-commerce platforms that directly ship goods from China to foreign customers. In 2013, for example, approximately 100 million foreign packages were shipped to the United States; by 2024 the U.S. received more than 1.3 billion packages. Packages shipped from China accounted for 60 percent of de minimis shipments in 2024. Even though, by law, such packages should be subject to the additional tariffs imposed on Chinese goods, such as antidumping or countervailing duties and Section 301 tariffs, in practice CBP does not typically collect tariffs on these packages below the de minimis threshold.
Ongoing legal challenges regarding the elimination of de minimis exception for China
Prior to the passage of the OBBA, President Trump in Executive Order 14256 took action to eliminate de minimis exceptions on imports from China (including Hong Kong). Such shipments from China have been subject to either a 54 percent tariff or a $100 fee per shipment. President Trump did so pursuant to his authority under the International Economic Emergency Powers Act (IEEPA). Whether IEEPA grants the President the authority to invalidate a statutory provision like the de minimis exemption is currently being challenged in court. Should the Trump Administration lose these challenges, it would likely also lose the authority to eliminate the de minimis exception by executive action through IEEPA.
In one case at the U.S. Court of International Trade (CIT), Axle of Dearborn, Inc. v. Department of Commerce, the plaintiff argues among other issues that IEEPA does not give the President authority to nullify the effect of duly enacted statutes. In response, the U.S. government argued that the President has the power to temporarily suspend the effect of a statute during an emergency, and because the President has statutory discretion to implement the de minimis program. The CIT has stayed this case in an order from July 28, noting that the outcome of proceedings at the Federal Circuit (see below) will determine the legality of the President’s action to suspend the de minimis exception through IEEPA.
Separately, the consolidated lawsuit over the President’s authority to implement tariffs under the IEEPA, V.O.S. Selections, Inc. v. Trump and Oregon v. Trump, challenges the President’s authority to impose tariffs under the IEEPA. Previously, the CIT ruled that IEEPA did not give the President authority to do so and ordered the CBP to suspend the collection of tariffs imposed pursuant to its authority, including those on de minimis shipments from China and Hong Kong. That order has been indefinitely suspended pending appeal. The Federal Circuit heard oral argument en banc on July 31, during which the judges appeared skeptical of the Administration’s authority to maintain tariffs under IEEPA.
When will the de minimis exception be eliminated?
Per Executive Order 14324, the de minimis exception will be eliminated starting August 29, 2025 at 12:01 a.m. eastern daylight time for all countries except China, for which this exception was already ended on May 2, 2025 by Executive Order 14256. In the near term, whether these executive orders may remain in effect depends on the outcome of the litigation before the Federal Circuit. The Federal Circuit ruling is in turn likely to be appealed to the U.S. Supreme Court. Thus, the final disposition of the de minimis exception may not be resolved for at least several more months.
Should the Federal Circuit and/or the Supreme Court rule against the Administration, the final end of the de minimis exception may not arrive until July 1, 2027, when the OBBA repeals the statutory requirement to set a $800 threshold for the collection of duties on commercial packages. As a result, the President, through the Secretary of Treasury, would gain discretion to eliminate—or restore—the de minimis exception, to set the exemption at a different threshold, or to apply the exception differently for different countries.Companies with supply chains that rely on de minimis shipments should continue to monitor developments in this area now due to the potential impact of Executive Order 14324. Companies that are impacted should also plan ahead for July 2027 when the OBBA's changes to the de minimis exemption becomes official.
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