The biggest change to hit e-commerce imports in decades is here. Here's how to survive it.
If you've been importing low-value goods into the United States, everything you knew about Section 321 is now obsolete.
On August 29, 2025, the de minimis exemption was suspended globally. The rule that allowed goods valued under $800 to enter duty-free with minimal customs formalities? Gone. Every single e-commerce parcel entering the U.S. is now subject to normal import duties, taxes, and full customs clearance procedures—regardless of value.
This isn't a minor tweak. It's a fundamental restructuring of how e-commerce imports work. And if you're not prepared, you're about to get crushed by duties, delays, and compliance headaches.
The Numbers That Explain Why This Happened
Section 321 shipments exploded from 134 million entries in 2015 to over 1.3 billion in 2024. That's nearly a 10x increase in less than a decade.
This massive volume overwhelmed CBP's inspection capabilities. Worse, de minimis shipments accounted for 90% of cargo seizures—fraud, counterfeit goods, and yes, fentanyl smuggling were running rampant through the low-value loophole.
The government decided enough was enough.
The Timeline You Need to Know
May 2, 2025: Section 321 suspended for China and Hong Kong specifically. Products manufactured in these regions no longer qualified for duty-free entry, regardless of where they shipped from.
July 30, 2025: President signs executive order to suspend de minimis globally.
August 29, 2025: Global suspension takes effect. All imports, regardless of value or country of origin, are now subject to duties, taxes, and full customs processing.
February 28, 2026: Only the ad valorem duty methodology may be used for postal shipments. The simplified fee-based option disappears.
What "Full Customs Processing" Actually Means
Under the old system, your $50 gadget from overseas cleared customs with minimal paperwork. Now that same shipment requires:
- Formal or informal entry filing through the Automated Commercial Environment (ACE)
- 10-digit HTS classification for your merchandise
- Duties and taxes paid based on the applicable tariff rate
- Potential PGA requirements (FDA, CPSC, FCC, etc. depending on product type)
- A qualified party to make entry (you or your customs broker)
The old Entry Type 86 still exists in ACE, but it no longer means duty-free. Shipments filed under it face the same duties and requirements as any other commercial import.
What's Still Exempt?
Very little. The remaining exemptions are narrow:
- Bona fide gifts as defined in 19 CFR § 10.153(a)—articles formerly owned by a donor who gave it outright to a donee without compensation. This does NOT include items acquired by purchase, barter, or similar transactions
- Certain donations and informational materials covered under 50 U.S.C. § 1702(b)
If you're importing commercial goods for resale, you're paying duties. Period.
The Cost Impact Is Real
Let's do the math on a typical e-commerce scenario:
Before (Section 321):
- 1,000 packages/month at $50 average value
- Duties: $0
- Customs broker fees: Minimal or none
- Total monthly cost: Near zero
After (Post-suspension):
- Same 1,000 packages/month at $50 average value
- Average duty rate: 7.5% = $3,750/month in duties alone
- Customs broker fees: $5-15 per entry = $5,000-15,000/month
- Merchandise Processing Fee: $0.3464% (minimum $33.58 per entry)
- Total monthly cost: $10,000+ minimum
That's a cost increase from nearly zero to $120,000+ annually for a modest e-commerce operation.
The "Enhanced Entry Process" Is Coming
CBP is working on combining two pilot programs—the Entry Type 86 Test and Section 321 Data Pilot—into a new "Enhanced Entry Process."
This would create a two-tiered system:
- Enhanced Entry Process: Streamlined electronic filing with expedited clearance for participants who submit additional advance data
- Basic Entry Process: Standard entry for those who don't participate in the enhanced program
By 2023, approximately 79% of de minimis entries were already using these pilot programs. If you weren't participating before, now's the time to get your systems ready.
How to Survive the De Minimis Death
1. Get Your HTS Classifications Right—Now
Every shipment needs a 10-digit HTS code. If you've been importing under Section 321 without proper classification, you have a massive backlog of work to do.
This isn't optional anymore. Wrong classifications mean wrong duty rates, and wrong duty rates mean penalties.
2. Establish a Customs Broker Relationship
Unless you have in-house customs expertise, you need a broker. Interview several. Look for:
- Experience with your product categories
- Technology capabilities (EDI, API integration)
- Volume capacity to handle your shipment counts
- Clear pricing structure (per-entry fees add up fast)
3. Reconsider Your Fulfillment Strategy
The economics of cross-border e-commerce just changed dramatically. Options to evaluate:
- Domestic fulfillment: Bulk import inventory to a U.S. warehouse, then ship domestically
- Foreign Trade Zones: Defer or reduce duties on goods held in FTZ
- Nearshoring: Source from countries with favorable trade agreements (USMCA, etc.)
4. Build Duty Costs Into Your Pricing
If you've been competing on price with duty-free imports, that advantage is gone—for everyone. Adjust your pricing to reflect the true landed cost of goods.
5. Audit Your Supply Chain for Section 301 Exposure
Products from China now face Section 301 tariffs ON TOP of regular duties. A $50 item could face 25%+ in combined duties. Know what you're importing and from where.
The Silver Lining
The playing field just leveled. Legitimate importers who were competing against duty-dodging drop-shippers now have a fair fight. Companies that invested in proper customs compliance are no longer at a cost disadvantage against those who exploited Section 321.
And businesses that get ahead of this transition—building efficient customs processes now—will have a competitive advantage over those scrambling to catch up.
What to Do This Week
- Audit your current imports: What's coming in under $800? What are the actual HTS codes?
- Calculate your new duty exposure: Use the HTS to estimate what you'll owe
- Contact customs brokers: Get quotes, understand their technology requirements
- Update your financial projections: Budget for the new reality
- Communicate with suppliers: Ensure you're getting accurate product information for classification
The de minimis exemption served its purpose for decades. But in an era of 1.3 billion annual shipments, it became a loophole too big to ignore.
Welcome to the new normal. The importers who adapt quickly will thrive. The ones who don't will find out exactly how expensive "free shipping" really was.
Need help classifying your products for the post-de minimis world? TariffLens uses AI to help you find accurate HTS codes in seconds—so you can focus on running your business instead of deciphering tariff schedules.