While there is still uncertainty around the final tariff rates, it is pretty clear that tariffs are here to stay and that they will be substantial.
Unlike Trump’s first term, when he initiated a trade war with China, this time the trade war is global. Rather than “near-shoring” or “friend-shoring” being encouraged, “on-shoring” will be the de facto policy push for the next 4 years.
So far, it looks like the only area where there might be containment is Mexico and Canada, who signed a new trade agreement with the US in 2020 called the United States-Mexico-Canada Agreement (USMCA). Currently, as long as goods fall under the USMCA, they are governed by it; all other unqualified goods are subject to tariffs, per the most recent April 2 “Liberation Day” executive order.
The Section 321 De Minimis exception allowed packages under $800 entering the US to undergo a simplified customs process and was tariff-free. Companies, especially Chinese heavyweights like Shein and Temu, utilized this loophole to import millions of cheap goods into the US tariff-free. Other companies looked towards Mexico and Canada as great places to establish third-party logistics (3PLs), as they were further protected by the USMCA.
The Section 321 De Minimis shipping exception was already under attack during the Biden administration, with a bi-partisan senate review underway starting in January 2025. With Trump taking office, the closing of the De Minimis loophole has only accelerated.
Currently, the only packages coming from China are subject to duties, as follows*:
(i) Ad Valorem Duty. 30 percent of the value of the postal item containing goods for merchandise entered for consumption on or after 12:01 am eastern daylight time on May 2, 2025.
(ii) Specific Duty. 25 dollars per postal item containing goods for merchandise entered for consumption on or after 12:01 am eastern daylight time on May 2, 2025, and before 12:01 am eastern daylight time on June 1, 2025, and 50 dollars per postal item containing goods for merchandise entered for consumption on or after 12:01 am eastern daylight time on June 1, 2025.
*There is no guidance as to whether this is the “lessor of” or “greater of” 30% duties and $25 per item. Some believe that the duties mean 30% plus $25 per item.
However, the rest of De Minimis shipments from around the world will be subject to tariffs once “systems” are in place and the US Customs and Border Patrol has a way to assess tariffs on the remaining shipments. While there is no formal timeline for the implementation of such systems, we believe that the loophole will be closed within the next 6 months.
For companies that rely on De Minimis shipments from other countries, such as Mexico, Canada, and Japan, it would be wise to plan for bulk imports and US domestic fulfillment if the cost calculations make sense. Fuse and our network of operators are always happy to help with this planning should the need arise.