Maria Pechurina, director of international trade at Peacock Tariff Consulting, discusses the impact on retailers of the Trump administration’s elimination of the “de minimis” duty exemption for small imported packages.

“De minimis” is Latin for “trifling” or “of minimal importance.” As it relates to imports, the term applies to the longstanding practice of exemption from import duties for individual packages below a certain value — in its most recent manifestation, $800. Pechurina notes that the waiver, which dates back in some form to the Trade Act of 1930, originally was intended to ease the processing burden on Customs officials. Now, “five and half million packages will be entering the U.S. daily, and Customs will need to process them,” she says. “It's not a free-for-all, but largely because of de minimis, [those packages] were able to float on in. Now it’s taking a big toll on Customs workers.” 

Over the years, the exemption had the further effect of expediting commerce for, supposedly, small businesses and entrepreneurships. It's those entities that will be hit hardest by the elimination of de minimis, Pechurina says. They’ll find it much more difficult to serve their customers, especially with the suspension of deliveries to the U.S. by some foreign postal services, in direct response to the administration’s action on de minimis.

Less affected, perhaps, will be fast-fashion “behemoths” such as China’s Shein and Temu, which took huge advantage of the de minimis exemption to flood the market with their goods. Pechurina says they saw the elimination coming, and began the mass importation of product into giant distribution centers in the U.S. to avoid the new tax The European Union and Latin America, meanwhile, are being overwhelmed with cheap goods, and their domestic producers are feeling the competitive pressure. 

Stockpiling of inventory by importers may have delayed the impact of the de minimis ruling on consumers, but come Halloween and Christmas, they may well start seeing fewer products and higher prices, Pechurina says.