The biggest money loophole in ecommerce history is gone. For years, the $800 de minimis rule (Section 321) let overseas sellers ship products into the US completely duty-free, which fueled Temu, AliExpress dropshipping, and thousands of cross-border sellers.
As of August 29, 2025, that exemption is suspended for everyone, no matter where a shipment comes from. Now every package faces tariffs, and postal shipments add a flat handling fee of $80 to $200 each.
For low-ticket dropshippers, that is game over. For US-based and bulk importers, it is a level playing field at last.
I have imported from China for 18 years running BumblebeeLinens.com, and here is exactly what changed, who wins, who loses, and what you need to do now.
Get My Free Mini Course On How To Start A Successful Ecommerce Store
If you are interested in starting an ecommerce business, I put together a comprehensive package of resources that will help you launch your own online store from complete scratch. Be sure to grab it before you leave!
Table of Contents
Key takeaways
- The $800 de minimis exemption ended August 29, 2025, for all countries. Every package now faces tariffs.
- Bulk commercial imports are mostly unaffected. If you already ship via FedEx, UPS, or DHL and pay duties, little changes.
- Postal shipments got hammered: country-specific IEEPA tariffs plus an $80 to $200 handling fee per shipment, collected before the package ships.
- Low-ticket dropshipping math collapses. A $20 China item shipped postal can now cost $100 to $220 once fees apply.
- Winners are US and bulk sellers; losers are Temu, AliExpress dropshippers, and foreign postal services.
What was the de minimis loophole (Section 321)?
Section 321 was a US customs rule that let any shipment valued at $800 or less enter duty-free. A $20 gadget on AliExpress, a $12 phone case on Temu, or a $5 handkerchief from a small overseas seller could clear customs for free. Crucially, it applied per package, not per person or per day, so sellers split shipments or shipped directly to customers to dodge import duties entirely.
That is how Temu offered rock-bottom prices and “free shipping” while still profiting, since it skipped the tariffs domestic sellers paid. It also created the entire low-ticket dropshipping industry: US sellers never touched inventory, they listed a product, took the order, and had it shipped directly from a Chinese warehouse duty-free. Some brands even parked inventory in Canada or Mexico and shipped small packages across the border to stay under $800.
What changed when de minimis ended on August 29, 2025
On August 29, 2025, the $800 threshold ended for everyone, regardless of origin or contents. The rules differ by how a package arrives:
- Bulk via commercial carriers (FedEx, UPS, DHL): you keep paying tariffs at the standard Most Favored Nation (MFN) rate, so little changes.
- International postal network (China Post, Canada Post, Royal Mail handing off to USPS): a whole new system. Tariffs are based on IEEPA rates (the International Emergency Economic Powers Act), which are country-specific, can change fast, and sometimes stack.
Postal shipments also carry three new requirements: you must declare the country of origin for every package, duties must be collected before the package ships (USPS no longer bills the recipient at delivery), and you pay a flat handling fee of $80 to $200 per shipment, per the White House fact sheet.
If you run a Temu-style or AliExpress-style operation, you now have to bake those costs into checkout. You cannot push them to the customer later.
What does a $20 import cost now under the new tariffs?
A $20 China item shipped postal now costs $100 to $220 once you stack the 30% IEEPA tariff and the $80 to $200 handling fee, versus about $3 to $6 in duties on the bulk commercial route. If you dropship individual products into the US via the postal service from anywhere, you are in trouble. Instead of MFN, you get IEEPA rates, and for China that is about 30% under the temporary truce, jumping toward 44% if the truce expires.
| Route | Tariff rate | Handling fee | Total cost on a $20 item |
|---|---|---|---|
| Bulk commercial (FedEx, UPS, DHL) | 15% to 30% MFN | None | $23 to $26 |
| Postal (USPS via China Post, etc.) | ~30% IEEPA | $80 to $200 per shipment | $100 to $220 |
On the postal route you must collect those duties at checkout, with no hoping the customer pays on delivery.
How does the de minimis change affect each ecommerce business type?
Impact splits sharply by business type: AliExpress dropshippers and Temu get crushed, Amazon FBA and bulk Shopify importers come out ahead, and small cross-border sellers have to rewire their checkout for Delivered Duty Paid.
| Business type | Impact | What to do |
|---|---|---|
| AliExpress dropshipping | Crushed (~30% duties + $80 to $200 per package) | Raise prices, move inventory to US, or switch source country |
| Temu | Crushed (entire model relied on the loophole) | Expect price hikes, fewer “free” deals, more US warehousing |
| Amazon FBA / bulk Shopify importers | Better off (already paid duties; postal competitors can’t undercut anymore) | Keep importing in bulk; the field just leveled |
| Small cross-border sellers (Canada/EU/Asia → US) | Must rewire checkout | Set up Delivered Duty Paid (DDP) and collect duties at checkout |
Here is each business type in more detail:
- AliExpress dropshipping: most orders ship postal, so you face roughly 30% duties plus $80 to $200 immediately. A $15 item with a $5 margin is gone. Survival means raising prices, moving inventory into the US, or sourcing from lower-tariff countries.
- Temu: built almost entirely on the postal loophole. Every package now needs tariffs paid before shipping, so expect price hikes, fewer “$1.98 free shipping” deals, and more US warehousing.
- Amazon FBA and Shopify owners importing in bulk: if you ship containers or pallets, you already pay duties, so little changes, and you can no longer be undercut by postal importers dodging tariffs. The field is more level.
- Small cross-border sellers: if you are in Canada, Europe, or Asia selling to US customers, you now collect duties and taxes at checkout for every order, which means setting up Delivered Duty Paid (DDP) and updating your checkout.
Why are postal shipments getting stuck under the new rules?
Postal shipments are getting stuck because manual customs processing cannot handle every package needing duties, USPS cannot collect duties at delivery, and many foreign postal carriers never built Delivered Duty Paid systems. Commercial carriers will adjust smoothly, since FedEx, UPS, and DHL already have electronic customs clearance tied into CBP.
The postal network is another story. A lot of international mail processing is still manual, with some ports of entry having one officer eyeballing labels. That worked when only a fraction of packages needed duties, and now it is all of them.
Because USPS cannot collect duties on delivery, every postal shipment must be Delivered Duty Paid, with duties collected at checkout and remitted before the package leaves the origin country. Many foreign carriers never built DDP at scale, so expect delays, packages stuck in limbo, and some sellers pausing US shipping entirely.
Winners and losers
The winners are domestic US sellers, especially small and mid-sized brands that competed against ultra-cheap duty-free imports, since overseas sellers now pay the same tariffs. If you source in the US, rising import costs make your goods even more competitive. Commercial carriers also win, and some overseas sellers may switch from postal to FedEx, UPS, or DHL to avoid the chaos.
The losers are Temu and AliExpress sellers, whose low-margin model depended on Section 321, and low-ticket dropshippers making a few dollars per item. Foreign postal services like Canada Post and Royal Mail also take a hit, since they must now collect duties at origin.
Bulk importers sit in a gray area: they already pay tariffs, so they are not hurt much and may benefit as small postal competitors vanish. The short version: if your business coasted on the $800 loophole, you are in trouble, and if you competed against those who did, you just got a boost.
What to do now
Sellers need to do four things now: run the new tariff math on top products, decide between raising prices or switching suppliers or moving inventory into the US, set up Delivered Duty Paid if you ship postal, and move fast before the window closes.
Start by running the numbers on your best-selling products, factoring in the MFN or IEEPA rates plus any Section 301 surcharges if you import from China. Once you know the hit, decide whether to raise prices, switch suppliers, or move inventory into the US so you import in bulk instead of one package at a time.
If you use the postal stream, set up a Delivered Duty Paid system immediately, since USPS will not collect from your customers, so you must charge at checkout and remit before shipping. That may mean upgrading your checkout software or using a logistics provider.
The window to adapt is small, and the sellers who act now will survive the transition.
Frequently asked questions
What is the de minimis exemption (Section 321)?
It was a US customs rule that let shipments valued at $800 or less enter the country duty-free. Because it applied per package, overseas sellers split shipments to dodge import duties, which powered Temu, AliExpress dropshipping, and low-ticket cross-border selling.
When did de minimis end?
The $800 de minimis exemption was suspended globally on August 29, 2025, for all countries and all shipment values, so every package entering the US now faces tariffs.
How much do the new tariffs and fees cost?
Bulk commercial shipments pay roughly 15% to 30% in standard duties. Postal shipments pay country-specific IEEPA rates (about 30% for China, potentially up to 44% or more) plus a flat handling fee of $80 to $200 per shipment, collected before the package ships.
Who wins and who loses from the de minimis change?
Winners are US-based sellers, bulk importers, and commercial carriers. Losers are Temu, AliExpress dropshippers, low-ticket cross-border sellers, and foreign postal services that must now collect duties at origin.
Does this affect Amazon FBA sellers?
Not much. If you ship containers or pallets into Amazon’s US warehouses, you already pay duties, so the change barely affects you, and you benefit because postal importers can no longer undercut you by dodging tariffs.
What should ecommerce sellers do now?
Run the tariff numbers on your top products, then raise prices, switch suppliers, or move inventory into the US for bulk importing. If you ship via the postal network, set up Delivered Duty Paid so duties are charged at checkout and remitted before the package leaves the origin country.
Ready To Get Serious About Starting An Online Business?
If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.
In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's free and you'll receive weekly ecommerce tips and strategies!
Related Posts In Legal And Taxes
- Is Your Business Just A Hobby In The Eyes Of The IRS?
- Do You Need Small Business Insurance With An LLC Or Corporation?
- Business Expenses: How To Take Tax Deductions On Your Car, Home, Travel, Meals & Equipment
- How To Trademark A Name For Amazon Brand Registry
- 11 Best Online Bookkeeping Services For Small Businesses
Steve Chou is a highly recognized influencer in the ecommerce space and has taught thousands of students how to effectively sell physical products online over at ProfitableOnlineStore.com.
His blog, MyWifeQuitHerJob.com, has been featured in Forbes, Inc, The New York Times, Entrepreneur and MSNBC.
He's also a contributing author for BigCommerce, Klaviyo, ManyChat, Printful, Privy, CXL, Ecommerce Fuel, GlockApps, Privy, Social Media Examiner, Web Designer Depot, Sumo and other leading business publications.
In addition, he runs a popular ecommerce podcast, My Wife Quit Her Job, which is a top 25 marketing show on all of Apple Podcasts.
To stay up to date with all of the latest ecommerce trends, Steve runs a 7 figure ecommerce store, BumblebeeLinens.com, with his wife and puts on an annual ecommerce conference called The Sellers Summit.
Steve carries both a bachelors and a masters degree in electrical engineering from Stanford University. Despite majoring in electrical engineering, he spent a good portion of his graduate education studying entrepreneurship and the mechanics of running small businesses.
