US suspends duty-free de minimis treatment for low-value shipments

• On 30 July 2025, US President Trump signed an Executive Order suspending the duty-free de minimis treatment for low-value shipments valued at US$800 or less, effective from 29 August 2025.
• Starting on 29 August, all imported goods that typically qualify for the de minimis exemption will be subject to applicable duties, calculated either as ad valorem or specific duties based on the country of origin.
• The specific duty method will be available for six months, after which all shipments must comply with the ad valorem duty method, potentially increasing costs for businesses relying on low-value imports.
• Affected companies should reassess their import strategies, update compliance procedures and consult with trade advisors to navigate the complexities of the new duty assessment methodologies.

United States (US) President Trump signed an Executive Order on 30 July 2025 suspending duty-free de minimis treatment for low-value shipments valued at no more than US$800, subjecting these shipments to all applicable duties.

Overview of the Executive Order

Starting 29 August 2025, all imported goods valued at US$800 or less, which would typically qualify for the de minimis exemption, will be subject to applicable duties. For packages sent through the international postal system, duties will be calculated using one of two methods:

1. Ad valorem duty: This duty will equal the effective tariff rate that is (i) imposed under the International Emergency Economic Powers Act (IEEPA); (ii) applicable to the product's country of origin; and (iii) based on the value of each package.
2. Specific duty: This duty will vary depending on the effective IEEPA tariff rate applicable to the goods' country of origin. The specific duty method will be available for six months, after which all shipments must comply with the ad valorem duty method. The specific duty method applies as follows:
   • Countries with an effective IEEPA tariff rate of less than 16%: US$80 per item
   • Countries with an effective IEEPA tariff rate between 16% and 25% (inclusive): US$160 per item
   • Countries with an effective IEEPA rate exceeding 25%: US$200 per item

Exemptions under 19 U.S.C. 1321(a)(2)(A) and (B) remain in place, allowing American travelers to bring back up to US$200 in personal items and receive bona fide gifts valued at US$100 or less duty-free.

Actions for businesses to consider

Affected companies should consider the following actions:

• Assess current import strategies to understand how the suspension of the de minimis exemption may affect their operations and cost structures. This includes evaluating the potential increase in duties for low-value shipments.
• Ensure that compliance procedures are updated to reflect the new duty assessment methodologies. This may involve training staff on the changes and implementing systems to accurately calculate and report duties.
• Consult trade advisors to navigate the complexities of the new tariff structures and aid compliance with updated regulations.

For additional information concerning this Alert, please contact:

Ernst & Young LLP (United States), Global Trade

• Sergio Fontenelle, New York 
• Lynlee Brown, San Diego 
• Nathan Gollaher, Chicago 
• Michael Heldebrand, San Jose 
• Helen Xiao, Chicago 
• Bryan Schillinger, Houston
• Jay Bezek, Charlotte 
• Prentice Wells, San Jose 
• Shane Williams, Houston 
• Renata Natalino, San Francisco 
• Parag Agarwal, New York 
• Nesia Warner, Austin 
• Celine Petersen, Chicago
• Cody Davis, Charlotte 
• Tanna Johnson, Denver 
• Christopher Bourdganis, Detroit 
• Ilona van den Eijnde, New York 
• James Lessard-Templin, Portland 
• Sundar Markandan, Irvine 
• Max Patel, Charlotte

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor