As of 2 May 2025, the United States has implemented significant changes affecting low-value shipments originating from China, Hong Kong, and Macau. These changes have substantial implications for international e-commerce businesses.

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READ MORE : Cross-Border Shipping to Canada: Upcoming Changes

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Understanding the De Minimis Rule

The de minimis provision in U.S. customs law allows for the duty-free importation of goods valued at $800 or less. This threshold has facilitated the growth of cross-border e-commerce by enabling retailers to ship low-value goods directly to U.S. consumers without incurring customs duties.

Recent Changes Affecting Chinese-Origin Goods

Under new directives based on the International Emergency Economic Powers Act (IEEPA), the U.S. Customs and Border Protection (CBP) has revised its treatment of low-value shipments from China, Hong Kong, and Macau:

• Loss of De Minimis Eligibility: Goods originating from these regions, even when shipped through third countries, no longer qualify for de minimis treatment. 
• Mandatory Formal Entry: Such shipments must now undergo formal customs entry procedures, regardless of their value. 
• Imposition of Additional Duties: These goods are subject to additional duties, potentially exceeding 145%, depending on the product category. 

These measures aim to address concerns over trade practices and ensure compliance with U.S. trade laws.

Impact on Shipment Volumes

The implementation of these changes has led to a significant decrease in the volume of de minimis entries:

• Daily Entries Decline: The number of daily de minimis entries has dropped from approximately 4 million to 600,000, representing an 85% reduction. 
• Increased Rejections: Over 110,000 shipments have been rejected due to misdeclared origins. 
• Shift to Formal Entries: There has been a notable increase in formal entry filings, indicating a shift in how low-value shipments are processed. 

These statistics underscore the substantial impact of the new regulations on international shipping practices.

Requirements for Formal Entry

Shipments requiring formal entry must comply with the following:

• Customs Broker Engagement: Importers must engage a licensed customs broker to facilitate the entry process. 
• Payment of Duties and Taxes: Applicable duties and taxes must be paid prior to the release of goods. 
• Comprehensive Documentation: Detailed documentation, including commercial invoices and origin declarations, is required. 

Failure to adhere to these requirements can result in delays, penalties, or seizure of goods.

Risks of Misdeclaring Country of Origin

Attempting to circumvent these regulations by misdeclaring the country of origin carries significant risks:

• Severe Penalties: Civil penalties can reach up to $50,000 per violation. 
• Shipping Restrictions: Offenders may face restrictions or bans on future shipments to the U.S. 
• Legal Consequences: Misrepresentation of origin is considered a serious offense under U.S. customs law. 

It is imperative for businesses to ensure accurate and truthful declarations to avoid these consequences.

Recommendations for E-Commerce Businesses

To navigate the new regulatory landscape, businesses should:

1. Verify Product Origins: Ensure that the country of origin is accurately determined and documented. 
2. Update Shipping Procedures: Adjust logistics and shipping practices to comply with formal entry requirements. 
3. Educate Customers: Inform customers about potential delays and additional costs associated with formal entry procedures. 
4. Consult with Experts: Engage customs brokers or trade compliance professionals to assist with the new requirements. 

Proactive measures will help mitigate disruptions and maintain compliance with U.S. customs regulations.

At MyDutyCollect, we support businesses in navigating these complex regulations by offering automated customs clearance, precise duty and tax calculation, and compliance solutions. As trade regulations evolve, having the right tools in place can make all the difference.

Get in touch with us to find out how we can assist your cross-border operations. Subscribe to our blog and visit our website and LinkedIn page for more updates. You can also contact us by sending a message to info@mydutycollect.com. We’d be delighted to hear from you.