The end of De Minimis: what supply chains must do now

Table Of Contents

• Why it matters: the ripple effects on supply chain
• Who's most exposed
• Not just a U.S problem: why the fallout is bigger
• Execution blind spots: what gets exposed now
• What to do now: mitigation strategies for ops leaders
• What this shift signals

For years, the US De Minimis program allowed low-value goods (under $800) to enter the country duty-free with minimal paperwork. It was a quiet enabler of e-commerce growth and global sourcing especially for retailers and small-to-mid-sized brands shipping direct to the United States from overseas.

Now, that’s changing. That advantage is now gone.

As of August 29th, 2025, the United States officially ends the De Minimis program for all low-value imports from all countries, including China and Hong Kong suspended since May 2025.

Customs clearance is no longer automatic. Duty exemptions have been revoked. And businesses that built fast, flexible fulfillment models around De Minimis are now facing an abrupt execution challenge. 

The impact?

Higher costs, longer delays and a major shift in how supply chain teams manage cross-border inventory.

Why it matters: the ripple effects on supply chain execution

Many businesses, especially in retail, consumer electronics, beauty and apparel have built execution strategies around duty-free, fast-entry shipments under the De Minimis threshold.

With the De Minimis carve out eliminated, every low-value commercial shipment now:

• Requires a full customs declaration
• May be subject to duties and inspection
• Faces longer clearance timelines and higher landed costs

Who’s most exposed?

These industries and models are likely to feel the most disruption:

• Apparel & Fast Fashion: Heavy use of low-value parcels direct from Asia; thin margins can’t absorb new duties.
• Consumer Electronics: Popular low-cost electronics and accessories often ship under De Minimis. 
• Beauty & Wellness: Direct to consumer skincare, supplements and cosmetic tools often ship from global factories direct to US customers.
• Drop Shipping & Marketplaces: Sellers relying on overseas fulfillment centers now face longer lead times and a higher risk of customs compliance violations. 
• SMBs with global factories: Increased complexity and cost could make US market access less viable.

Not just a US problem: why the fallout is bigger

Although the policy change is US-specific, its impact extends across the larger supply chain. Here’s how:

1. Exporters and suppliers overseas

Factories in China, Vietnam, India and beyond will see lower US order volumes and tougher customs hurdles unless they restructure distribution models.

2. Cross-border platforms and marketplaces

 Marketplaces like Temu, Shein, and AliExpress now face rising costs and customs complexity. To retain U.S. access, they’ll need to invest not just in bonded warehouses or domestic fulfillment, but also in customs brokerage partnerships or filing software that supports ACE-based informal entries.

3. Freight forwarders and 3PLs

 Freight forwarders and 3PLs, especially those supporting cross-border parcel flows, now face a new compliance burden.  

With CBP requiring all informal entries to be filed via brokers or ACE-certified software, providers must either partner with brokerage networks or build automated customs support into their offerings.  

Smaller brokers and agile 3PLs may find new growth opportunities, while large providers will face onboarding pressure and documentation risk at scale.

 4. Multi-national brands

Global brands selling into the US now need to revisit landed cost strategies, inventory placement and whether their current DTC models can withstand new duty burdens.

Bottom line: If you sell into the US, this affects your execution stack no matter where you're based.

Execution blind spots: what gets exposed now

The sudden policy shift is exposing cracks in fulfillment and transportation systems that weren’t built for compliance complexity. Common vulnerabilities include:

• No landed cost visibility: Most order management platforms can’t model updated duty impacts in real time.
• No parcel batching logic: Systems that default to small parcel shipments now risk overpaying on duties or creating bottlenecks.
• Rigid fulfillment paths: Routing logic may be hardcoded, with no flexibility to shift to bonded warehouses or nearshore inventory.
• Manual customs workflows: Teams may be scrambling with spreadsheets instead of automated customs declaration data.
• No broker integration or ACE support: Importers must now route filings through brokers or software; manual processing at volume is no longer viable.
• Software onboarding pressure: High-volume importers that once bypassed brokers are now scrambling to integrate with ACE-certified solutions to avoid shipment holds.

These are more than just fulfillment inefficiencies; they’re compliance vulnerabilities that put both brokers and brands at risk of penalties for misclassification or undervaluation.

What to do now: mitigation strategies for ops leaders

Now that De Minimis is gone, the question isn’t whether to adapt, it’s how fast. Here’s where to start:

1.  Make tariffs a first-class variable in fulfillment optimization

Your Order Management System  should simulate new duty-inclusive pricing and recommend routing paths based on cost and speed.

Infios Order Management  has been enhanced to natively incorporate tariff-related costs into the sourcing and fulfillment decision engine; alongside shipping, labor, delivery SLAs and backlog.

With our new tariff-aware cost modeling framework, you can:

• Treat tariffs as dynamic costs at the line-item level
• Optimize for gross margin impact, not just delivery speed
• Configure rules that prioritize low-tariff sourcing
• Pull real-time or batch tariff rate updates via iPaaS integration with external data providers or internal engines

And coming soon: machine learning-driven sourcing logic that can detect tariff trends and optimize routing automatically. This includes automatically factoring in informal entry thresholds, broker capacity, and software constraints in routing decisions.

In a post–De Minimis environment, where duties can swing week to week, these enhancements give operations leaders a critical advantage: margin control in motion.

2. Pre-declare with EDI and digital customs data

Ensure your TMS and carrier stack support pre-clearance workflows via digital customs submission; this is especially critical with parcel volumes rising.

3. Shift from parcel to pallet where needed

Using landed cost data and logistics analytics from your Freight Audit Payment (FAP) solution, re-evaluate whether it’s cheaper to consolidate Direct to customer (DTC) shipments into LTL (Less Than Truckload) or FTL (Full Truckload) freight to central US hubs and redistribute domestically.

4. Introduce bonded or nearshore warehousing

 If you're relying heavily on cross-border fulfillment, now’s the time to re-think both inventory placement and customs filing strategy.  

Bonded U.S. zones or nearshore nodes (e.g. Mexico or Canada) offer opportunities to consolidate shipments, reduce filing complexity and better align tariff payments with demand.  

But without an automated broker or ACE filing plan, even a nearshore warehouse won’t eliminate the new compliance overhead.

5. Vet your vendors and partners

Ensure your suppliers, drop-shippers and marketplaces are not under-declaring shipments or exposing you to customs violations.

From loophole to liability: what this shift signals

The De Minimis program was never designed for high-volume e-commerce. Its end signals a broader trend: a global pivot toward enforcement, transparency and trade policy re-alignment.

In this new environment, supply chain winners won’t be the ones with the cheapest source. They’ll be the ones with the most adaptable execution stack.

What matters now is execution readiness. 

If your systems are modular, flexible and built for composability, you’ll absorb the shock better than competitors who rely on static workflows or manual customs processes.

Sources:

• Congress.gov: Import Security and Fairness Act (2024)
• Reuters: US lawmakers end e-commerce loophole used by China sellers (2025)
• CBP: De Minimis Entry Guidelines (Archived)
• https://www.whitehouse.gov/presidential-actions/2025/07/suspending-duty-free-de-minimis-treatment-for-all-countries/