Independent online sellers are confronting significant operational changes and potential cost increases as a long-standing U.S. trade provision exempting low-value imports from tariffs is eliminated for goods originating from China and Hong Kong.
Effective just after midnight Eastern time on Friday, May 2, 2025, goods valued at $800 or less originating from these locations will no longer enter the U.S. duty-free under the de minimis provision, which previously allowed one such shipment per person per day.
President Trump ordered the closure of this specific loophole in early April, a move the administration linked to combating fentanyl flows and addressing complaints from larger U.S. retailers about competition from sites like Shein and Temu.
The policy shift introduces substantial new costs for goods previously exempt. As confirmed by a U.S. Customs and Border Protection (CBP) notice, non-postal shipments from China/HK under $800 now require formal customs entry, a more complex process involving duties and fees. Items arriving via express carriers could face tariffs reaching 145%.
Goods sent through the U.S. Postal Service are subject to a different, rapidly escalating structure: initially set at 30% or a $25 fee in early April, the charge was raised to 120% of the item’s value or a $100 fee per package starting May 2nd, with the fee scheduled to increase again to $200 on June 1st. This change affects a massive volume of trade; CBP processes approximately 4 million de minimis shipments daily, a fourfold increase since 2018, largely driven by platforms like Shein and Temu.
Small Sellers Confront Sourcing and Pricing Dilemmas
The termination of the duty-free allowance presents immediate challenges for small e-commerce businesses, many operating on platforms like Etsy or eBay, that source materials or finished products directly from China. Kelly Kendall, whose Chicago-area business sells craft kits made with supplies mostly imported from China under the $800 threshold, anticipates needing to raise her prices significantly once her current inventory runs out.
“I don’t think people understand the larger impact for really small businesses, where this is my main source of income,” Ms. Kendall told The New York Times. Her attempts to find domestic textile manufacturers were unsuccessful due to her small order volumes. “A lot of factories, if I try to go directly to them, won’t deal with me because I don’t have a large amount of business for them,” she explained.
Sellers outside the U.S. shipping Chinese-made goods to American buyers are also caught in the crossfire. Justin Crowder, owner of Cafuné Boutique in Montreal, experienced chaos during a brief, similar suspension of the rule in February.
A surge in U.S. orders for a Chinese-made espresso maker coincided with the temporary policy change, resulting in customers unexpectedly facing import fees ranging erratically from $38 to $159 for the same item due to apparent customs processing issues. Mr. Crowder absorbed these costs but expressed concern about the lack of predictability.
“My heart sank when I realized that a number of our customers would be impacted by this,” he said, adding, “We’ve just been in a hamster wheel chasing down as much information as possible.” Émile Arsalane, an eBay and Poshmark seller in Quebec, preemptively halted about 70% of his sales to the U.S. last Friday – those involving Chinese goods or items without clear origin documentation – fearing the impact.
“Tariffs on China are affecting Canadian sellers more than tariffs on Canada,” Mr. Arsalane observed. “It’s the heart of the issue for small sellers.” The general anxiety among e-commerce operators was reflected in an April survey from Passport Shipping, which found 81% believed shifting tariff regulations could put their global strategy at risk.
Logistics and Platforms Adapt to New Rules
The U.S. import system and the companies navigating it were already under pressure before this latest change. On April 5th, U.S. Customs began requiring formal entry processing for all imports valued above $800 (down from $2,500), a move separate from the de minimis tariff change but one that created immediate backlogs. Citing these delays, DHL temporarily stopped accepting U.S.-bound B2C shipments over $800 on April 21st.
Canadian shippers Chit Chats and Stallion Express also reported significant disruptions and returned packages during the brief February de minimis pause due to confusion over new documentation requirements outlined in company blog posts. Kensen Wah, Stallion Express’s chief revenue officer, advised clients then, “I don’t think it’s safe for businesses to rely on the de minimis now.”
Major e-commerce platforms have reacted differently. While Amazon, after facing White House criticism, denied reports on April 29 that it planned to display tariff costs on its main product pages, competitors like Temu and Shein began adding explicit import charges or raising prices around April 25th.
Some Shein items reportedly saw increases over 300%. Shein is also reportedly considering restructuring its U.S. supply chain by shifting production away from China, a move potentially impacting its planned London IPO. Amazon CEO Andy Jassy had previously acknowledged expecting third-party sellers on Amazon.com – the group most affected by the de minimis change – would likely pass tariff costs onto consumers.
Broader Trade Context and Policy Volatility
The de minimis change is part of a wider, assertive trade policy stance enacted by the Trump administration. On April 2nd, new global tariffs were announced based on a formula some linked to AI chatbot output, leading to levies like 34% on many Chinese goods. While a 90-day pause on most reciprocal tariffs (excluding China’s) began April 10th, the baseline tariffs and the specific de minimis elimination for China/Hong Kong remain.
This environment spurred preemptive actions, like Apple airlifting iPhones in late March, and retaliatory measures, such as China imposing its own tariffs and export controls on critical rare earth minerals on April 4th. The policy shifts have created what Wedbush analyst Dan Ives described in mid-April as “massive uncertainty and chaos for companies trying to plan their supply chain, inventory, and demand.”
The political sensitivity was highlighted when the White House blasted the initial reports about Amazon’s alleged plans as a “hostile and political act.” Press Secretary Karoline Leavitt questioned the company’s motives, asking, “Why didn’t Amazon do this when the Biden administration hiked inflation to the highest level in 40 years?” The policy volatility and resulting cost increases continue to create an unpredictable operating environment for businesses involved in international e-commerce, potentially impacting areas like the estimated $18+ billion Chinese advertisers spend annually on U.S. platforms.
