The $800 Party Is Over
Cross-Border Commerce Just Got Pricier
The exemption that's powered a decade of direct-to-consumer shipment into the U.S. just ended and brands need to act.
Yesterday, President Trump signed an executive order eliminating the de minimis exemption globally. For UK and EU brands shipping directly to American customers, the economics of your U.S. strategy have fundamentally changed.
Whilst the threat has been long standing - this is no longer theoretical. This is policy with a clear implementation date.
TL;DR
The U.S. has eliminated the de minimis exemption that allowed packages under $800 to enter duty-free. Starting August 29, every parcel faces duties, extended processing, and complex documentation requirements.
UK/EU brands shipping direct to U.S. customers now pay duties on retail prices, whilst those using U.S. 3PLs or with local warehousing pay on the customs price costs—creating a ~70% duty arbitrage opportunity. Brands need to model new costs, evaluate U.S. fulfilment, and move quickly or risk being left behind.
If you’re a UK or EU brand that needs help or guidance navigating this, email me on luke@commercethinking.com
What Just Changed (And Why You Should Care)
Since 2015, any package valued under $800 could enter the U.S. duty-free under Section 321 of the Tariff Act. No customs forms. No brokerage fees. No import duties. It was the invisible subsidy that made small-parcel international ecommerce work.
Here's the timeline that matters:
April 2, 2025: De minimis exemption removed for China and Hong Kong shipments July 30, 2025: Executive order signed eliminating exemption globally
August 29, 2025: Global repeal takes effect
Starting August 29, every package - regardless of value - entering the U.S. will require:
Complete commercial entry documentation (Type 86 or Type 01/11)
Full 10-digit HTS classification and detailed product descriptions
Import duties based on product classification
Customs brokerage processing with expanded data requirements
Extended clearance times due to increased CBP scrutiny
The temporary approach uses flat-fee duties ($2-8 per package) whilst CBP builds systems for proper ad valorem duties. But don't get comfortable with those low fees. The long-term plan is full duty rates based on your product's HS classification.
Who Gets Hit Hardest
UK and EU DTC brands without U.S. warehouses are in the crosshairs. If you've been shipping direct from the UK, EU etc to U.S. customers, your fulfilment model just became economically questionable.
The worst-hit categories:
Fashion and accessories: Already operating on compressed margins
Beauty and wellness: High shipping volumes, price-sensitive customers
Supplements and health: Complex compliance requirements
Home goods: Heavy products with high shipping costs already
Drop shipping models are particularly exposed. If you're fulfilling U.S. orders from overseas suppliers, every shipment now carries duty exposure and extended processing times.
Small order economics face new challenges. That £45 hoodie order? It now carries additional duty exposure and longer processing times. Conversion rates on smaller orders will likely decline.
To 3PL or Not to 3PL?
Because duties are calculated differently depending on how you import. When you ship direct to consumers, customs assesses duties on the declared retail value of each package. That £75 hoodie? You're paying duty on £75.
But when you import bulk inventory into a U.S. 3PL or warehouse, duties are calculated on your landed cost or wholesale value - say £20-30 for that same hoodie. The duty savings alone could be 50-70% per unit.
The calculations are really significant:
Direct shipping: Pay duty on $100 retail price = ~$10-25 duty per unit (depending on classification)
Bulk import via 3PL: Pay duty on $30 cost price = ~$3-7 duty per unit
For brands doing any kind of U.S. volume, this pricing difference could help offset the cost of establishing U.S. fulfilment operations.
Add in faster delivery times (2-3 days domestic vs 7-14 international), easier returns processing, and reduced per-package compliance burden, and the business case becomes more compelling.
One client we work with ran these numbers months ago. Their average U.S. order is $85, but their cost of goods is $28. Under direct shipping, they'll pay duties on $85. Via 3PL, they pay on $28 - without moving stock into a US warehouse facility their US site is no longer commercially viable.
Their response? "We're evaluating 3PL options this week." And now they’re setup with a US 3PL.
What You Need To Do Right Now
If you don’t have a plan already in place for this, you need to act now.
This week:
Model your new landed cost structure including duties, brokerage fees, and extended shipping times
Update your checkout flow to warn customers about potential delays and additional fees whilst you figure out
Prepare customer service scripts for the inevitable complaints
Review your minimum order thresholds—anything under $75-100 may no longer be viable
This month:
Seriously evaluate U.S. 3PL partnerships. The business case for local fulfilment just got much stronger
Model the duty arbitrage: importing bulk inventory at cost price versus paying duties on retail price per parcel
Consider bonded warehouse arrangements that allow you to pay duties as goods are sold, not when they arrive
Reassess your U.S. market prioritisation. Some brands may need to pause American expansion until they can afford proper infrastructure
Compliance prep: Previously, shipments under $800 could enter under Section 321 with minimal paperwork. Now every parcel requires complete commercial entry documentation, whether through Type 86 (lower value with agency requirements) or standard Type 01/11 entries.
Your new data requirements include:
Full 10-digit U.S. HTS codes (not just 6-digit HS codes)
Detailed product descriptions (no more generic "clothing" or "accessories")
Declared value in USD with quantity and unit of measure
Complete consignee information and Importer of Record details
Country of origin documentation and forced labour compliance declarations
Carrier tracking linked to commercial invoices
Get this wrong and you're facing penalties, delays, and potential cargo holds. Work with freight partners who understand CBP's new requirements and can handle the data complexity.
The brands getting ahead of this are already shifting inventory into U.S. warehouses and taking advantage of the duty arbitrage between retail-price DTC shipments and cost-price bulk imports.
What To Watch Next
Bilateral deals: The U.S.-UK relationship remains strong. Watch for potential carve-outs or preferential arrangements, though don't bank on them.
Competitor moves: Many brands have already shifted to U.S. fulfilment models. They saw this coming and adapted early. We're going to see many more non-U.S. brands opening 3PLs and warehouses across the pond.
State-level responses: Some states may offer incentives for international brands to establish local operations. Economic development agencies are already reaching out to affected companies.
The Bigger Picture
The winners will be brands that can afford to localise their fulfilment operations. The losers will be smaller brands that built their entire U.S. strategy around shipping directly from home markets.
The duty arbitrage from bulk importing at cost price versus paying retail-price duties per parcel could fund your entire 3PL setup.
But moving quickly is the key phrase here. The brands that come out ahead won't be the ones who had the best strategy on paper. They'll be the ones who executed fastest when the rules changed.
The $800 party lasted a good decade. Now it's time to build businesses that work in the new reality.
Thanks for reading Commerce Thinking!