Supply Chain
De Minimis / Section 321 Impact on DTC in 2026
The $800 de minimis exemption was suspended for all countries on August 29, 2025 and is set for permanent statutory repeal on July 1, 2027. Low-value parcels are now dutiable, so the ship-direct-from-Asia model loses its duty-free edge. On a $120 China-origin parcel that can add roughly $35 to $45 in duty, tariff overlay and clearance cost.
Key Takeaways
- Duty-free de minimis for parcels at or under $800 was suspended for all countries on August 29, 2025, and the One Big Beautiful Bill Act permanently repeals it worldwide on July 1, 2027.
- On an illustrative $120 China-origin parcel, the new dutiable regime can add about $35 to $45 once you stack MFN duty, the Section 301 China surcharge, the 10% Section 122 overlay and brokerage.
- Ship-direct-from-Asia and order-splitting under $800 no longer dodge duty, and mis-declaring value now risks a 50% minimum penalty floor under the 2026 enforcement push.
- Bulk B2B import to a US 3PL, paying duty once at the door, usually beats per-parcel clearance because brokerage and handling are a fixed cost per shipment.
- Rebuild landed cost and reprice before peak: a model built on pre-2025 duty-free assumptions understates true cost on every cross-border order.
If your DTC brand built its economics on shipping cheap parcels straight from a factory in Shenzhen to a customer in Ohio, that model just lost the thing that made it cheap. For years the $800 de minimis rule, the Section 321 entry, let low-value parcels clear US customs duty-free. That door is closed. It was suspended for all countries on August 29, 2025, and it is scheduled to be permanently repealed on July 1, 2027.
This is not a tariff-of-the-week headline you can wait out. It is a structural change to how cross-border parcels are taxed, and it hits the lowest-margin, highest-volume part of ecommerce hardest. Here is what actually changed, what it does to your landed cost, and which fulfillment models survive it.
What actually changed with de minimis
De minimis was the rule that let any shipment valued at or under $800 enter the US free of duty under Section 321. It is the reason a Temu or Shein parcel, or your own direct-from-Asia order, could land with no duty line at all. Three things ended that:
- Suspension for all countries (August 29, 2025). A 2025 executive order ended duty-free de minimis globally, applying tariffs to shipments under $800, as recorded by the Brookings regulatory tracker. China-origin goods had already lost the benefit earlier in the term, the August order made it universal.
- The Section 122 fallback (February 24, 2026). After the Supreme Court invalidated the IEEPA-based tariffs in February 2026, the administration replaced them with a global 10% tariff under Section 122 of the Trade Act of 1974. Low-value parcels did not snap back to duty-free, they moved under the new schedule.
- Permanent repeal (July 1, 2027). Per the White House customs enforcement fact sheet, the One Big Beautiful Bill Act permanently repealed the statutory basis for de minimis worldwide, effective July 1, 2027. After that, no regulator can quietly restore the $800 threshold.
The net: there is no general duty-free waiver for commercial ecommerce parcels anymore, and there will not be one without new legislation.
The new dutiable and clearance cost per parcel
Under de minimis, a low-value parcel carried essentially zero import cost. Now every parcel is a dutiable entry, and the cost stacks in layers. For a typical China-origin parcel you are looking at the base MFN duty by HTS code, the Section 301 China surcharge if it applies to that line, the 10% Section 122 overlay, and per-parcel customs brokerage and clearance fees that the carrier charges to actually move it through.
Here is what that does to a single $120 parcel, before and after.
Read it the way a CFO would: the parcel itself did not change, but roughly $40 of new cost appeared on a $120 order. On a product with a 60% gross margin, that order had about $72 of margin to work with. Knock $40 off and you are at $32, before you have paid for the ad that acquired the customer. For a lot of cheap, impulse-buy SKUs, that math goes negative. If you want to see how this lands by category, our breakdown of average CPG landed cost per unit by vertical shows where the absolute dollars are biggest.
The brokerage and clearance piece is the quiet killer. Duty is a percentage, so it scales with value. Brokerage is largely a fixed fee per shipment. When your shipment is one $120 parcel, a flat clearance fee is brutal as a percentage. When your shipment is a container, that same type of fee is rounding error. That single dynamic is what breaks the per-parcel model and rewards consolidation.
Which fulfillment models break
Not every model is hit equally. Here is the honest sort.
| Fulfillment model | What happens under the new regime |
|---|---|
| Ship direct from Asia, per order | Breaks for low-value SKUs. Duty plus the 10% overlay plus per-parcel brokerage eats the margin on cheap items. |
| Order-splitting under $800 | Dead. There is no duty-free threshold to split under, and it now invites penalties. |
| Bulk import to US 3PL, then ship domestic | Wins for most brands. Duty paid once at the door, brokerage amortized across the whole shipment. |
| Nearshore or domestic production | Strongest hedge if your duty exposure is high, though it is a slower, capital-heavy move. |
The brands feeling the most pain are the ones whose entire pitch was cheap goods shipped individually from overseas. The brands barely feeling it are the ones already importing in bulk to a US warehouse, because they were already paying duty and clearing in volume. If you are somewhere in the middle, this is the year to move.
The bulk-import and nearshore response
The fix is not complicated, it is just work. You are trading a variable per-parcel cost you no longer control for a fixed per-shipment cost you can plan around.
- Re-run landed cost on every cross-border SKU. Add MFN duty, any China or sectoral surcharge, the 10% Section 122 overlay where it applies, and clearance. If your current cost number assumes duty-free parcels, it is wrong on every order. Our primer on what landed cost actually includes is the checklist: supplier cost plus freight, duty, tariffs and handling, which typically runs 12 to 35% above the supplier invoice and more once tariffs stack.
- Move to bulk import plus a US 3PL. Bring product in by the container or pallet, pay duty once, and fulfill domestically. You convert thousands of per-parcel clearance fees into one. This is the single highest-leverage move for a direct-from-Asia brand. Watch your freight timing though, brands rushing to bulk-import ahead of rule changes have already pushed up container rates in tariff frontloading.
- Reclassify and verify HTS codes. Duty is driven by classification. A wrong or lazy HTS code can cost you points of margin on every unit. Get a broker to confirm your codes, this is cheap insurance.
- Reprice deliberately, do not absorb silently. Decide which SKUs eat the cost, which raise price, and which get cut. A $40 hit on a $120 order is a pricing decision, not a rounding error.
- Stop any order-splitting immediately. With a 50% minimum penalty floor and CBP directed to target high-volume ecommerce flows, valuation games are a liability now, not a tactic.
- Model your origin mix against the tariff schedule. Where you source determines your surcharge exposure. If you want to see how your category's sourcing maps to the tariff hit, start with our hub on where DTC products are made and the 2026 tariff hit, then quantify your own exposure with the DTC tariff exposure index and rebuild the per-unit number with the landed cost tariff calculator.
If you want help turning these layers into a real per-SKU landed cost inside your P&L, and a decision on which products survive the change, that is exactly the work our team does day to day.
Methodology
The regulatory timeline, the August 29, 2025 suspension for all countries, the post February 2026 Section 122 10% fallback, the July 1, 2027 OBBBA repeal and the 50% penalty floor, is drawn from primary and near-primary sources: the White House customs enforcement fact sheet, the US Customs and Border Protection Section 321 program page, and the Brookings regulatory tracker. The per-parcel before-and-after figures are an illustrative model for one $120 China-origin parcel, not a quote: actual duty depends on HTS classification, origin and overlapping tariff programs, and brokerage is a carrier fee that varies by provider. Landed-cost ranges draw on Eightx's landed cost primer. Confirm current requirements with CBP or a licensed customs broker before relying on them.
Frequently Asked Questions
what happened to the $800 de minimis exemption in 2025?
Duty-free de minimis treatment was suspended for all countries effective August 29, 2025, after a 2025 executive order ending the exemption globally. Commercial parcels at or under $800 that used to clear duty-free are now treated as dutiable entries. The One Big Beautiful Bill Act then permanently repeals the statutory basis for de minimis worldwide on July 1, 2027.
is the ship-direct-from-asia dtc model still viable in 2026?
It still works operationally, but it lost its main financial advantage. Without duty-free de minimis, every parcel from Asia carries MFN duty, any China or sectoral surcharge, the 10% Section 122 overlay where it applies, and per-parcel brokerage. For low-value, low-margin SKUs that added cost often wipes out the contribution margin, which pushes brands toward bulk import.
how much does losing de minimis add to a low-value parcel?
It depends on HTS classification and origin, but for an illustrative $120 China-origin parcel you can stack roughly $7 MFN duty, $9 Section 301 surcharge, $12 from the 10% Section 122 overlay and about $12 brokerage and clearance, for around $35 to $45 of added cost. That is real margin on a sub-$150 order.
can i still split orders under $800 to avoid duty?
No. The duty-free threshold is suspended, so there is nothing to split under. Worse, the 2026 enforcement push directs CBP to scrutinize high-volume ecommerce flows and sets a 50% minimum penalty floor for customs violations, so structuring shipments to dodge duty now carries real downside, not just lost time.
what is the cheapest way to import low-value dtc goods now?
For most brands, consolidate into bulk B2B shipments to a US fulfillment center, pay duty once at the door, then ship domestically to customers. Brokerage and handling are largely fixed per shipment, so paying them once on a container beats paying them on thousands of individual parcels. Nearshoring is the next lever if duty exposure stays high.
when is de minimis permanently repealed?
The One Big Beautiful Bill Act permanently repeals the statutory basis for the de minimis exemption worldwide effective July 1, 2027. After that date, CBP cannot restore an $800-style duty-free threshold by regulation, so any future relief would require new legislation. In the meantime the exemption is already suspended in practice.