This story was produced by our colleagues at the BBC.
Tariffs are the major theme of the Trump administration’s trade policies this year. But the White House also ended the tax exemption on packages under $800 being shipped to the U.S. — the so-called “de minimis” exemption, which came to an end in August. How are businesses at home and abroad faring four months on?
Until August, anyone could send a parcel to the United States tariff-free, so long as the value of the item was less than $800. Businesses from around the world took advantage of the rule; almost 1.4 billion packages entered the U.S. duty-free last year.
With two of China’s largest online retailers — Shein and Temu — each sending hundreds of millions of parcels to the States annually, the de minimis rule found itself in the sights of President Donald Trump.
“De minimis, it’s a big deal. It’s a big scam going on against our country, against really small businesses,” the president said in February.
U.S. Commerce secretary Howard Lutnick explained why the tax exemption had to go: “Foreign countries were sending in little packages for free and knocking out mom and pop businesses across America.”
The most immediate impact was on businesses outside of the U.S.
“Thirty to 40% of my jewelry business was in the U.S., and now I’ve had to stop that entire part of my business. And I’m not the only one,” said Jess Van Daan, a jewelry maker based in Australia.
In removing the tax exemption, the White House said it wanted to level the playing field for U.S. companies. So have they seen a difference since the changes?
Madeline Knutson, who runs a mail-order business out of Minot, North Dakota, said she’s much more careful about where she buys her products from.
“I tend to look where they’re shipping from because that impact has caused us to raise our prices for things. People are definitely looking at prices more,” she said.
Since the de minimis exemption was abolished, the number of parcels coming to the U.S. worth less than $800 has fallen by 54%, according to the Universal Postal Union, a United Nations agency.
One sector that has done well out of the changes is the logistics business. DHL is one of the world’s leading courier companies.
“2025 has been a super complex year,” said Oscar de Bok, who leads DHL’s global forwarding division. “Every time that something new got announced, then shippers were making sure that their products would be shipped before this new tariff would come. So we got high seasons, many of them throughout the year.”
As for the effect on consumers, “across the board, prices are just higher,” said Madeline Knutson. “With a bigger business, they’re able to eat the cost a little bit more to keep it less expensive, where we’re just a little like mom-and-pop shop.”
All the extra costs can’t just be absorbed by all businesses. As the flow of tax-free goods slows, it seems it may be U.S. producers and customers who are paying the price.
