The de minimis update: A new chapter for small business competition

If you sell online in the U.S., you’ve likely been watching the policy landscape closely—and with good reason. One of the most impactful changes to cross-border shipping in years is now official: As of May 2, 2025, the U.S. is eliminating duty-free de minimis treatment for low-value imports from China.

The policy, which previously allowed goods valued under $800 to enter the country duty-free, has long been used by major Chinese platforms like Temu and Shein to ship goods directly to American consumers with minimal cost or customs interference.

Now, that’s changing.

This policy shift is poised to reshape how international goods move through the U.S. market—and how small domestic brands compete.

What’s happening with de minimis?

On April 17, 2025, President Donald Trump signed an executive order ending duty-free de minimis treatment for low-value imports from China. Beginning May 2, 2025, all shipments—regardless of value—that originate in China will be subject to duties and standard customs processing.

This move is part of a broader trade policy strategy aimed at curbing what many see as unfair competitive advantages for Chinese sellers operating in the U.S. ecommerce space. Platforms that rely on high-volume, low-cost, direct-to-consumer shipping may now face higher operational costs, longer delivery timelines, and increased regulatory oversight.

🔍 Important distinction: The de minimis policy change is not the same as the recent tariff updates you may have seen in the news. While both impact import costs, de minimis specifically affects duty-free shipping thresholds for small-value packages, whereas tariffs apply broader taxes to entire categories of imported goods. For more on tariffs and how they affect pricing, check out our guide on how new tariffs are impacting ecommerce brands in 2025.

Why this matters for small businesses

For U.S.-based ecommerce brands, the new de minimis policy could have far-reaching effects—particularly when it comes to leveling the competitive playing field.

Until now, many small brands have found themselves up against ultra-low-priced competitors whose business models depend on shipping direct from overseas without paying duties or facing customs delays. This created pricing pressure that’s hard to match, even for the most efficient operations.

With this policy shift, that dynamic starts to change:

• Price advantages shrink for international sellers: Without the benefit of duty-free treatment, platforms shipping from China may need to raise prices or absorb added costs.
  
  
• U.S.-based brands gain operational visibility: Domestic sellers, who often fulfill orders faster and with better customer communication, may benefit from increased consumer trust and convenience.
  
  
• Room to highlight value beyond price: When price gaps narrow, qualities like sustainability, local sourcing, and personalized service stand out more.

This change won’t remove all obstacles—but it could offer relief to small brands that have been undercut by volume-driven overseas sellers. For more on how broader trade policy shifts are unfolding, check out our recent blog on what ecommerce and product-based businesses need to know about 2025 trade policy.

How to stay ahead of the curve

While this policy specifically impacts cross-border shipping from China, it signals a larger shift toward tighter trade enforcement and more localized commerce. Here’s how small businesses can take action now:

• Optimize your fulfillment strategy: The convenience of fast, reliable shipping will matter more than ever. If you’re still managing inventory out of your living room, it might be time to explore scalable solutions like co-warehousing.
  
  
• Refine your pricing strategy: As overseas prices rise, U.S.-based brands have a window to adjust their pricing models—without feeling like they’re in a race to the bottom.
  
  
• Showcase your brand’s unique edge: Consumers are more likely to support small businesses when they understand your mission and values. Make sure your story is front and center on your website, social channels, and packaging.
  
  
• Stay informed: Trade policy is moving quickly this year. We’ve got a breakdown of how tariffs are impacting small business logistics and what you can do to stay prepared.
  

A policy shift that reshapes competition

The end of de minimis duty-free treatment for Chinese imports will affect both international sellers and the small businesses that have long competed against them.

For many U.S. ecommerce brands, it’s an opportunity to regain ground and stand out for the things that truly matter—quality, service, and values.

Want to learn more about this and other recent policy changes related to tariffs? Watch our on-demand webinar, Tariffs and Turbulence: What 2025 trade policy means for your ecommerce business.