At the end of August, 2025, the U.S. ended the de minimis exemption. That would appear to be a good thing for independent retailers, but there are of course two sides to every issue.

The de minimis exemption allowed most goods to enter the U.S. without tariffs, duties, or full customs formalities if the shipment was valued at less than $800 or less. For Americans, it meant that we could accept personal gifts without paying duty, and also receive small shipments of wholesale merchandise without the hassle of hiring a customs broker and the expense of paying duty.

But in recent times, this rule has allowed huge Chinese companies such as Shein and Temu to ship duty-free goods directly to consumers. According to NBC News, as many as half of all packages with de minimis exemptions were coming from China. It has been difficult for both large and small retailers to compete with the extremely low prices of these overseas e-commerce platforms.

Ending the exemption was intended to help level the playing field, and to help reduce the trade deficit.  But the Chinese discount giant Temu has already set up US operations in California, Texas and New Jersey, and is advertising “no import charges for local warehouse items” on their website.

The new ruling impacts vendors in other countries, including Mexico and Canada. We buy from a number of Canadian companies, including Umbra and Danica, and they have been shipping from distribution centers in the U.S. for many years. This does not mean that no duties and taxes are being paid – but it allows the company to quote a price to U.S. customers that already takes these costs into account.

For those who purchase via Faire, this new ruling is a major impediment to buying from small vendors in other countries – so it’s wise to pay attention to whether a company is American.  Faire notes on its website that goods shipped internationally through the postal system are now charged ad valorem duty, which is a percentage-based tariff, based on the value of the goods and the tariff rate of the country of origin There is a temporary option of specific duty, which is a flat-rate fee of $80 to $200 per item (i.e., package), but this will expire early in 2026.

With or without the de minimis provision, it’s impossible to compete with look-alike items that are priced on Temu and other platforms for less than our wholesale cost. But fortunately we have the advantage of being able to promise customers products of dependable quality, and to offer them consistently excellent personal service.

Happy Retailing,
Carol “Orange” Schroeder