Starting May 2, 2025, duty-free imports from China and Hong Kong under the De Minimis provision (Section 321 of the Tariff Act) came to an end.
In its place, Executive Order 14256 introduces sweeping changes—including flat-rate fees and a hefty 54% ad valorem duty—that will fundamentally reshape how U.S. importers do business.
The CBP is also proposing additional rules that would exclude entire product categories exempt under the De Minimis policy and require additional documentation. Suppose you import goods into the United States. In that case, you will need to rework your customs strategy to ensure that all your imports can clear customs easily without significantly impacting your bottom line.
This blog will explain everything you need to know about these upcoming changes and what you can do to stay compliant and avoid disrupting your supply chains.
What’s Changing And Why?
The official reasoning for these changes is the current administration’s concerns about synthetic drugs making their way into the country from China. Officials have cited that China has been exploiting the De Minimis policy by mislabeling products and undervaluing said goods to avoid scrutiny.
If you import goods from China, these are the changes that came into effect from the 2nd of May, 2025:
- You can no longer claim the $800 De Minimis exemption.
- All shipments (if coming via post) are now subject to a 54% ad valorem duty or a flat-rate charge of $100 per postal item
- All non-postal shipments will now have to go through a formal customs process and will no longer be eligible for the Type 86 Entry.
Several other proposed changes are going to affect imports from the rest of the world and address the trade imbalance. The Customs and Border Protection Agency (CBP) has proposed two new rules that could expand these changes to all countries:
- The first proposes a new entry system for De Minimis shipments called the “Enhanced Entry process” that will require the submission of additional information, such as detailed product descriptions, information about the buyer and seller, and the 10-digit Harmonized Tariff Schedule of the United States (HTSUS) classification code.
- The second is a proposal to strip De Minimis eligibility from goods subject to tariffs under Sections 201, 232, or 301.
In short, goods from anywhere, even under the $800 limit, will be subject to additional tariffs and paperwork.
How Will the Above Changes Impact You as an E-commerce Importer?
As an importer, here is what you can expect from how the tides change.
Higher Costs Per Shipment
With De Minimis off the table (a definite for imports from China, and with more countries potentially next if the proposed rules get implemented), you will see a dramatic rise in cost per shipment. You must be prepared to account for these additional charges on top of your logistic expenses.
A Complex Customs Clearance Process
You will also have to factor in a heavier compliance workload. Clearing customs will now require additional (and more complex) documentation per shipment, which will result in more legwork for your teams and an increased risk of errors.
Longer Customs Clearance Durations
Your De Minimus shipments that used to breeze through customs will now be subject to additional scrutiny. This will most definitely result in delays, more so for imports from China, with the Type 86 entry also no longer an option.
Simply put, you must rethink and re-evaluate your fulfillment strategy in the coming days.
The Impact on Customs Brokers
The aforementioned changes are going to have a significant impact on customs brokers as well, and on several fronts, such as:
A Surge In Entry Volumes (And Complexity)
With even low-volume shipments now having to go through a formal or informal entry process, each shipment will need additional documentation, reviews, and a more hands-on approach to clearing customs. Multiply that by the tens of thousands of packages per day, and you can imagine the sheer amount of legwork brokers have to brace for.
Increased Scrutiny On Customs Compliance
With fentanyl coming into the country as one of the key drivers behind the proposed changes, customs brokers will face additional scrutiny in all required documentation. This will invariably have a massive impact on their compliance workload, as the pressure to keep goods moving will land squarely on their shoulders.
Investment In Technology Will Become a Necessity
Any broker still working on a legacy system will need to invest in scalable solutions to support the spike in workloads that will come their way. Their tech stack will now have a direct impact on their clients’ bottom lines.
What Changes Would You Need To Adopt To Handle The New Customs Clearance Requirements?
With the customs clearance process tightening, you must rework your soon-to-be outdated workflows.
If you want to continue receiving your shipments without delays, you will need to work smarter and faster, and here is how you can do it:
Automate What Slows You Down
You will now be required to create entries for each shipment, and if your import volumes are high, this process, if done manually, will be a tremendous drain on time and resources.
A manual process will also introduce the possibility of errors that will delay shipments. The solution is automation—it will allow you to file entries faster, with minimal mistakes, and help you scale when required.
Capitalize On AI-Powered Tech
Getting the tariff classification wrong on your imports is not going to be one of the biggest customs compliance mistakes in the future.
Use AI to read product descriptions, assign the now-mandatory HTS codes to your shipments, and flag anything that looks off per the current regulations. With tariffs already eating into your margins, every shipment clearing customs without a hitch will be a win.
Sync Your Entire Tech Stack
Automation and AI work best when your customs system integrates directly with your tech stack, be it an ERP system, a warehouse management solution, or an e-commerce store. That way, any required information, such as product descriptions, seller information, and shipment information, feeds directly into your customs filing process.
How Can CustomsCity Help Adapt To Meet These New Requirements?
CustomsCity is a customs brokerage platform that also specializes in compliance consulting. As a result, we have all the tech, tools, and expertise in place to help any importer or customs broker address the complexities this new era of customs compliance entails. Here is how:
- Comprehensive Entry Management: Our Automated Broker Interface (ABI) platform allows the automated creation of various entry types, including Consumption, Informal, Warehouse, and mass upload of Type 86 & Type 11 entries. Features like entry cloning and customer-specific templates help minimize errors and facilitate faster customs clearance.
- AI-Driven Tariff Classification: To reduce the possibility of misclassification, our platform employs AI to analyze product descriptions and assign accurate Harmonized Tariff Schedule (HTS) codes.
- Real-Time Compliance Checks: CustomsCity provides real-time querying capabilities for manifest data, exchange rates, and Partner Government Agency (PGA) requirements. This capability gives you the foresight to address any potential issues before they impact your supply chain.
- Integration with Existing Systems: Our platform supports integration with Enterprise Resource Planning (ERP) systems and e-commerce platforms via APIs. This interoperability will help eliminate any tech silos and the need for manual intervention.
- Documentation and Audit Support: Our platform features a robust suite of secure document management features, including the ability to perform audits and compliance checks, to help you stay compliant with CBP’s documentation requirement, which requires maintaining records for at least five years.
Turn Compliance Into A Competitive Edge With CustomsCity
Every new customs rule offers a chance to become even more efficient (albeit out of necessity). That said, rather than waiting until the last minute, making all the changes required to be customs-compliant early on can give you a significant edge over your competition.
The new customs clearance standards are here to stay (and more may follow). The question now is how fast you can adapt, and CustomsCity can help you clear customs faster with less risk and, more importantly, before the bottlenecks begin.
So, if you’re serious about adapting to these changes early on, contact us now!
