As if 2025 wasn’t already chaotic enough for eCommerce store owners, here comes another curveball: the U.S. government has announced that the de minimis exemption will officially end on August 29, 2025.

For years, this exemption allowed international businesses to ship packages valued at $800 USD or under into the U.S. duty-free. It simplified cross-border eCommerce, with an estimated 4 million packages a day clearing under de minimis. But come this fall, those days are over — and the impact on small and medium-sized businesses could be massive.

In this post, I’ll break down what this change means, what’s likely to happen, and the action steps you can take now to protect your business.

What the End of De Minimis Means

After August 29, 2025, all packages shipped into the U.S. will be subject to customs duties and clearance procedures, regardless of value. That means even a $40 T-shirt or a $25 skincare item could face duties, taxes, and brokerage fees.

Here’s what we can expect:

• Slower processing times. With millions of new shipments requiring clearance, bottlenecks are inevitable. While U.S. Customs is working to automate, it’s a massive adjustment.

• Increased costs. Depending on the country of origin and tariff schedules, brands could face either flat fees ($80–$200 per shipment) or ad valorem duty rates (a percentage of the item’s value).

• Customer confusion. Who pays the duty — you or the customer — depends on who the importer of record is. Without clarity, customers may be surprised at checkout or upon delivery.

• Tough decisions for brands. Many businesses are already shutting off U.S. shipping completely because of the complexity and cost. Others are scrambling for workarounds.

A Real-World Example

For my own fashion brand, Encircled, this change forced a painful decision. The U.S. represents 40–50% of our sales. But because apparel made in Canada doesn’t fully qualify under the strict CUSMA (Canada–U.S.–Mexico Agreement) rules of origin, our products would be hit with duties of 41–67% plus clearance fees.

The math didn’t work. So, we had to pause shipping to the U.S. entirely. It wasn’t easy, but it was necessary.

If you’re in a similar situation, know you’re not alone. Thousands of small businesses globally are facing the same dilemma.

Action Steps to Take Now

1. Assess Your Exposure

• What percentage of your sales are U.S.-based?

• If your products were assessed for duty, what rates would apply?

• Could you sustain your current margins, or would adjustments be necessary?

This will give you a baseline understanding of how critical this issue is to your business.

2. Confirm Your Trade Agreement Eligibility

If you’re in Canada or Mexico, confirm whether your products qualify under CUSMA. If you’re in the EU, UK, or elsewhere, research what free trade agreements may apply.

• Get a customs broker on board. They can help you understand your duty exposure and ensure you’re compliant with paperwork and systems.

• If possible, look for brokers with a presence both in your home country and in the U.S.

3. Decide Who the Importer of Record Will Be

This could be:

• You (the brand)

• Your customer

• Your customs broker

• Your 3PL

Each option has pros and cons. If you pass duties to the customer, you risk abandoned carts. If you absorb them, you’ll need to rethink your pricing strategy.

4. Explore Delivery Duty Paid (DDP) Solutions

• Canadian brands: Providers like ChitChats and Stallion Express are working on affordable DDP options to help businesses collect tariffs at checkout.

• Global brands: Shopify integrates with apps like EasyShip, TeleShip, FlavorCloud, and Sonos. Do your research — pricing varies widely.

5. Review and Adjust Pricing

You may need to:

• Increase prices to cover duties and fees.

• Or, lower U.S. prices slightly if passing duties along, to remain competitive.
  Factor in app costs, brokerage fees, and clearance charges.

6. Consider U.S. Fulfillment

For some brands, setting up U.S.-based fulfillment could make sense. It creates new costs and tax liabilities, but it may reduce duty exposure and speed up delivery. In certain cases (like apparel under CUSMA quotas), it’s the only feasible option.

7. Expand in Local or Alternative Markets

If the U.S. is no longer viable:

• Explore local retail opportunities (stores, markets, pop-ups).

• Collaborate with nearby brands for giveaways or co-marketing.

• Work with local influencers or directories.

• Double down on existing customers through email, loyalty programs, and repeat-purchase incentives.

While no replacement market matches the size of the U.S., diversifying reduces risk.

8. Communicate Clearly with Customers

• If you’re still shipping to the U.S., explain duties upfront at checkout.

• If you’re pausing shipping, remove U.S. shipping options from your site immediately. Don’t just cancel orders — Shopify won’t refund your transaction fees.

• Use announcement bars, cart notes, emails, and social posts to keep customers informed.

My Honest Take

When I first read about the de minimis changes, my reaction was to throw in the towel. After screaming into a pillow (highly recommended), I reminded myself: small businesses are resilient.

Yes, this is frustrating. Yes, it adds cost and complexity. But with a clear plan, your business can adapt.

Here’s the truth: this policy doesn’t just affect international sellers. Many U.S.-based small businesses rely on de minimis to import raw materials and components. The ripple effects will be huge.

That’s why collaboration is key. Keep sharing solutions in your networks, talk to your shipping providers, and connect with your trade commissions. The more informed we are, the stronger we’ll be together.

Final Thoughts

The end of de minimis is one of the biggest shifts eCommerce has faced in years. But you don’t have to navigate it alone.

Start with the basics:

• Understand your exposure.

• Confirm your trade agreement eligibility.

• Decide on your importer strategy.

• Explore DDP and U.S. fulfillment.

• Communicate with your customers.

And remember, sometimes the best thing you can do in moments like this is take a breath, regroup, and then take action.

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