How the end of duty-free de minimis shipping is reshaping online imports

For nearly a decade, a little-known customs rule let millions of cheap packages from overseas cross into the United States every day without paying duty or going through a formal customs entry. That rule, known as the de minimis exemption, has now been suspended, challenged in federal court twice in 2026, and scheduled by Congress for permanent repeal in 2027.

The change touches anyone who orders from an overseas retailer, and it has forced small importers, freight forwarders and the U.S. Postal Service to rebuild how low-value shipments move across the border.

What the Exemption Used to Do

The rule traces to Section 321 of the Tariff Act of 1930. In 2016, the Trade Facilitation and Trade Enforcement Act raised the exemption's value threshold from $200 to $800, letting shipments at or under that amount enter the country without formal customs entry and, in most cases, without duty.

U.S. Customs and Border Protection says the volume of de minimis shipments exploded after that change, from 134 million packages a year in 2015 to 1.36 billion in 2024 — more than 4 million packages every day, according to a CBP news release.

How the Suspension Unfolded

CBP suspended the exemption in stages: for shipments from China and Hong Kong under executive orders signed April 2, 2025, with enforcement beginning May 2, 2025, and worldwide under an executive order signed July 30, 2025, with global enforcement beginning August 29, 2025, according to the CBP release.

The effect on international mail was immediate. The Universal Postal Union reported that traffic from its 192 member countries fell 81% on August 29 compared with a week earlier, and 88 foreign postal operators told the UPU they had suspended some or all parcel service to the United States rather than start collecting U.S. duties at the point of mailing, CBS News reported.

CBP framed the suspension as a security measure. Citing fiscal year 2024 data, the agency said 98% of narcotics seizures and 97% of counterfeit-goods seizures involved de minimis shipments, and CBP Commissioner Rodney Scott said the exemption had "handed criminal networks a free pass."

On June 24, 2026, CBP published two interim final rules that formally codified the suspension in regulation for every mode of shipment, grounding it in a separate statutory provision, 19 U.S.C. 1321(a)(2)(C), and creating a new informal entry process for international mail, according to the National Law Review and BDO.

A Supreme Court Ruling Complicates the Legal Basis

On February 20, 2026, the Supreme Court ruled 6-3 in Learning Resources, Inc. v. Trump, consolidated with Trump v. V.O.S. Selections, Inc., that the International Emergency Economic Powers Act does not authorize a president to impose tariffs. Chief Justice John Roberts wrote that the statute contains no reference to tariffs or duties. The government stopped collecting IEEPA-based tariffs, and by July 2026 CBP had refunded roughly $81 billion to importers through an automated system, according to a summary of the case.

The de minimis suspension had originally been ordered under IEEPA authority too, so the ruling raised questions about whether it could stand. On February 20, 2026, President Trump signed a new executive order reaffirming the suspension, with the administration arguing it "is not affected by changes to the validity of IEEPA tariffs imposed in previous actions," according to Supply Chain Dive. Trade lawyers quoted in that report noted the same reasoning the justices used to strike down IEEPA tariffs could, in principle, be extended to strike down an IEEPA-based revocation of an exemption.

Separately, after the ruling, the administration replaced the IEEPA tariffs with a new 10% global import surcharge under Section 122 of the Trade Act of 1974, effective February 24, 2026, citing the country's balance-of-payments deficit; duty collection on postal shipments during the transition was tied to that surcharge rate, BDO reported.

The Courts Weigh In: The Detroit Axle Case

The clearest legal test of the suspension's authority came from a family-run auto-parts distributor. Axle of Dearborn, Inc., which does business as Detroit Axle and imports parts from overseas manufacturers, sued the Department of Commerce, arguing that the president had no power to rescind the exemption and that the agencies implementing the change had acted arbitrarily.

On August 13, 2026, the U.S. Court of International Trade rejected that challenge and upheld the government's authority to suspend the exemption. The court reasoned that de minimis is a "privilege" the president can void under IEEPA, and drew a distinction between ending an exemption and imposing a new tax, according to a summary of the ruling from the Ecommerce Innovation Alliance. The court also found the suspension's implementation by customs agencies to be "ministerial" and not subject to Administrative Procedure Act review. An appeal remains possible, but the summary noted that businesses were advised not to plan around a reversal.

What It Means for Shoppers and Small Importers Now

Every commercial shipment into the United States, regardless of value, now requires a formal or informal customs entry and a 10-digit Harmonized Tariff Schedule code, according to BDO. For international mail, CBP has built a new informal entry process for shipments valued at $2,500 or less, but it carries new obligations: customs bonds for postal entries, monthly reporting with payment through Pay.gov, and entry filings that only licensed brokers or importers with entry rights may submit.

CBP's electronic version of that new mail-entry process, called Entry Type 13, was scheduled to begin testing September 22, 2026, per BDO's review of the rule, which also underwent a public comment period that ran through July 24, 2026.

For small businesses built around shipping low-cost goods directly to U.S. customers, the practical effect is that items once cleared free of duty now carry the same tariff, brokerage and compliance costs as much larger commercial shipments.

What Comes Next

Regardless of how the Detroit Axle appeal or any future litigation turns out, Congress has already set an end date. The 2025 tax and spending law known as the One Big Beautiful Bill Act eliminates the de minimis privilege under the Tariff Act of 1930 by statute starting July 1, 2027, according to Benesch Law's summary of the legislation. A related provision of that same law, in effect since August 3, 2025, imposes civil penalties of up to $5,000 for a first violation and up to $10,000 for subsequent violations on anyone who misuses the administrative exemption to evade other customs laws.