E-commerce Survival Guide: Handling De Minimis Changes & Tariff Hikes
- Freya Jane
- Director of Customer's Success
For years, the De Minimis rule allowed businesses to import goods into the United States for less than $800 without paying tariffs or filing customs declarations.
It has been a lifesaver for dealers, eCommerce vendors, and customs brokers, especially for those who deal in high-volume, low-cost goods.
Imagine you are an e-commerce company and your operating expenses suddenly increase by 20%. Your cross-border operations are slowed down by new legal requirements, documentation, and unforeseen expenses. Does that seem daunting?
It is the current reality that e-commerce businesses sending goods to the USA must deal with.
E-commerce is changing dramatically on a global scale. The industry is being shaken by two significant developments:
- The removal of the de minimis threshold for most countries sending goods to the USA.
- A significant rise in import taxes across all categories and geographical areas
As a result of these changes, the cost and complexity of cross-border trade have significantly increased.
What was previously a seamless worldwide selling model for small and mid-sized e-commerce companies (SMBs) today necessitates strong compliance with the tariff regulations.
The U.S. government has declared that low-value imports from all over the world will no longer be eligible for the de minimis exemption as of 02 May 2025.
As a result, even smaller shipments will be subject to duties, which will strain business profits and make customs procedures more complicated over time.
This blog post is intended to help e-commerce businesses thrive in this complicated tariff era.
Understanding the de minimis threshold
What is de minimis?
The de minimis threshold, which is one of the highest in the world at $800, enables businesses to ship low-value goods to consumers without having to deal with drawn-out customs procedures or additional import fees.
Why de minimis mattered for e-commerce
The de minimis threshold has long been the go-to tactic for e-commerce businesses because it allows them to:
- Offer duty-free pricing on small parcels
- Avoid formal customs declarations
- Ensure faster shipping times
- Maintain low total landed costs
Learn more about de minimis with our helpful blog: Click here.
Changes to de minimis rule
Recently, the US issued an executive order to end the de minimis exemption for low-value parcels from different countries, particularly from China. It is aimed at combating unfair trade practices and promoting domestic businesses. Now all the parcels under $800 moving to the USA must:
- Be declared at customs
- Pay duties and taxes based on classification
- Undergo full screening and documentation
New tariff landscape challenges for e-commerce businesses
The removal of de minimis has introduced new hurdles for e-commerce businesses; let’s go through the major challenges of the new trump tariff era.
Tariff hikes
Many countries that send goods to the USA have to deal with the increased tariffs after the removal of the de minimis rule.
Key tariff actions and percentages
Here’s a table summarising some of the main tariff percentages applied to various countries:
| Country/Region | Tariff Percentage | Effective Date | Notes |
|---|---|---|---|
| China, Hong Kong, Macau | 125% (additional) | April 9, 2025 | This is in addition to previous tariffs, bringing the total to 145%. |
| China (Postal Carve out) | 120% of order value, or $100 per postal item | April 10, 2025 | This will increase to $200 per postal item on June 1, 2025 |
| Various Countries | 10% (universal) | April 5, 2025 | This is a universal tariff applied to most countries, with exceptions. |
| Various Countries (Reciprocal Tariffs) | 17% – 49% | April 9, 2025 | These are additional tariffs applied to specific countries based on reciprocal trade imbalances. |
| Canada, Mexico (Non-USMCA) | 25% | March 4, 2025 | Tariffs on goods that do not qualify under the USMCA trade agreement. |
| Canada (Energy) | 10% | March 4, 2025 | Tariffs specifically on energy imports. |
| Global (Steel and Aluminum) | 25% | March 12, 2025 | Tariffs on all steel and aluminum imports. |
Products under fire for e-commerce industry
Many everyday items may become more expensive as a result of the new 10% universal tax and high reciprocal duties on imports from different countries like China, Vietnam, and the EU. It is more likely expected that retailers will pass these higher import expenses on to customers.
These products will be more affected by the tariff hikes:
- TVs and iPhones will be particularly heavily hit. The majority of iPhones are still made in China, and since Chinese imports are subject to a 34% tariff, tech costs might quickly increase.
- The cost of cars will increase significantly. Even American-made vehicles that use foreign components are impacted. Basic models may cost consumers an additional $2,500 to $5,000, and imports may cost considerably more.
- Tariffs of up to 46% on clothing and footwear from Bangladesh, Vietnam, and China, where most American retailers purchase clothes, have raised prices overall.
- French, Italian, and British wine and spirits are also affected. Because of compounding expenses in the supply chain, a 20% tariff on EU imports could result in a price rise for consumers of 40% or more.
- Many items like chocolate, furniture, coffee, and even Swiss watches will now face tariffs between 10% and 31%, making them more expensive at checkout.
E-commerce businesses attempting to maintain their competitiveness while preserving profit margins may find it difficult to cope with these pricing increases.
Solution provided by iCustoms for e-commerce
After Trump eliminated the de minimis exemption, every e-commerce shipment will be subject to the duties and taxes, which can be a daunting task to calculate accurately. Here comes the iCustoms’ tariff calculator as a survival tool for e-commerce businesses.
By accurately and instantly calculating the applicable duties and taxes for cross-border sales across more than 32 countries, this AI-powered tool empowers e-commerce companies.
Here’s how the iCustoms tariff calculator assists with post-de minimis challenges:
Accurate goods classification
The e-commerce businesses need to pay attention to the accurate classification of goods to find the correct Harmonised System (HS) code.The accurate determination of tax and duty depends on the accuracy of HS codes.
Get assistance from the iCustoms AI-driven goods classification tool, named iClassification , and get accurate HS codes for your goods.
Automated assessment of duty and tax
E-commerce businesses, particularly those dealing with a large volume of parcels, find it daunting and time-consuming. It takes a lot of time and is prone to error to manually research and calculate customs and taxes for every overseas order. This procedure is automated by iCustoms, which saves a significant amount of time and money.
Reduced customs delays
For the e-commerce industry, two of the main reasons for customs delays are inaccurate duty calculations and incomplete declarations. iCustoms helps businesses create legal shipping documents by giving them accurate tariff information up front, which lowers the possibility of shipment delays.
Preventing expensive fines and penalties
Customs officials may impose hefty fines and penalties for misclassifying items or calculating duties incorrectly. These risks are reduced by iCustoms’ AI-powered tariff calculator and real-time regulatory updates, which guarantee compliance and shield companies from unanticipated financial consequences.
Wrapping up
With the de minimis rule coming to an end and trade protectionism on the rise, cross-border e-commerce is being put to the ultimate test. However, businesses can thrive in this complicated era of tariffs with accurate resources. Here comes iCustoms to the rescue!
With the iCustoms iTariff tool, e-commerce sellers can confidently calculate the applicable taxes and duties while maintaining compliance and cutting expenses.
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About iCustoms
iCustoms is an all-in-one solution helping businesses automate customs processes more efficiently. With AI-powered and machine-learning capabilities, iCustoms is designed to streamline your all customs procedures in a few minutes, cut additional costs and save time.
Simplify Customs with our Powerful Customs Management Software
Automate declarations, track shipments, & ensure compliance.