United States Begins to Restrain Cross-Border E-commerce

E-commerce platforms and others could face significant challenges due to recent and proposed changes to de minimis entry (the process for importing products without tariffs and with simplified customs procedures if the total import value is less than $800 per day). The Trump administration’s February 1, 2025, tariff orders, issued pursuant to the International Emergency Economic Powers Act (IEEPA) on imports from Canada, China, and Mexico prohibited de minimis entries, a significant disruption to the business practices of international e-commerce retail. The actions against Canada and Mexico are on hold but could return as soon as March 4. Highlighting the challenge of reforming the system, the tariffs on China are in effect but the de minimis prohibition was quickly suspended until the government can develop new entry procedures. Though imposed suddenly, these short-lived prohibitions are just the latest developments in a years-long debate about the future of de minimis entry. Even before the suspension announcements, two pending rules and ongoing congressional debate on de minimis reform signal more changes may be coming for de minimis imports from all other countries. Companies whose business models rely on de minimis shipments are taking note and preparing for changes ahead.

Political focus shifts from trade facilitation to customs enforcement

De minimis entry under Section 321 of the Tariff Act of 1930¹ allows an importer to bring shipments into the United States without filing formal entry paperwork or paying taxes and duties so long as the total daily value of the importer’s entries is below $800. Since the modern de minimis entry procedures were introduced in 1995, international e-commerce retail has become the dominant user of de minimis entry. De minimis entry gives Americans access to a wider variety of goods, facilitates trade, supports the e-commerce industry and decreases inspection burdens for US Customs and Border Protection (CBP). 

Despite those advantages and past bipartisan support, the system has recently invited controversy. As e-commerce shipments through the de minimis channel have increased to millions of parcels every day, groups seeking stronger customs law enforcement, industries that have suddenly found themselves competing with the rapid emergence of cross-border e-commerce, and those seeking to reduce US trade relations with China have all begun to call for significant reform.The spotlight on de minimis entry has intensified with the prioritization of import prohibitions on goods made with forced labor, which has increased the need for supply chain visibility and customs disclosure. Some have argued that the advantages of de minimis entry create a “loophole” that evades enforcement of those prohibitions.

President Trump suspends Chinese-origin goods from de minimis entry

With growing support for action on de minimis entries across both parties and key Republican constituencies, attention quickly turned to what Donald Trump would do upon assuming the presidency on January 20, 2025. On February 1, 2025, Trump issued an executive order pursuant to the president’s authority under IEEPA directing the United States to impose a new ten percent tariff on all imports from China (including Hong Kong).² The order also initially suspended access to customs de minimis entry for all covered products. When the China de minimis prohibition was in force, entries previously filed through carrier manifests or simplified Type 86 entries were required to file a formal entry and pay all duties and applicable fees. This not only meant paying the new ten percent duty, but also any other duties from which the import was previously exempted due to its de minimis status (including the Section 301 tariffs imposed during Trump’s first term). Similar executive orders imposing tariffs and prohibiting de minimis entry for imports from Canada³ and Mexico⁴ are suspended until March 4, 2025.

Imports from China—the origin for the majority of de minimis entries⁵ —lost access to the de minimis entry system on February 4. CBP issued special guidance on the evening of February 3, stating that CBP’s Automated Commercial Environment (ACE) will automatically reject the de minimis clearance for ineligible shipments.⁶ The US Department of Homeland Security guidance for China (and Canada before its withdrawal) also stated that international mail would need to undergo formal customs entry processes. On February 4, the US Postal Service (USPS) briefly suspended parcel entry from China to comply with the directive. However, the action led to confusion and USPS restored service by February 5, stating, “USPS and Customs and Border Protection are working closely together to implement an efficient collection mechanism for the new China tariffs to ensure the least disruption to package delivery.”⁷ A few days later, on February 7, the White House acknowledged the challenges of suddenly ending de minimis entry, issuing an amendment to the original tariff order that suspended the original de minimis prohibition until the Secretary of Commerce sends notification to the president that “adequate systems are in place to fully and expediently process and collect tariff revenue […] for covered articles otherwise eligible for de minimis treatment.”⁸

If imposed, the restrictions would remain in effect indefinitely, until the president decides to remove them. Trump appears to be using the tariffs as negotiating leverage, seeking increased border security and counternarcotics cooperation with China (and Canada and Mexico) in exchange for lifting the restrictions. His position on general, long-term de minimis policy reform is unclear. The January 20 presidential memorandum on “America First Trade Policy” directed the government to review the de minimis entry processes and associated risks of tariff revenue loss, drug trafficking and smuggling of counterfeit products.⁹ The memorandum instructed the government to send a report to Trump by April 1 that would “recommend modifications as warranted to protect both the revenue of the United States and the public health by preventing unlawful importations.” The instructions endorse the often-voiced concerns about de minimis entry, but did not identify any specific policy actions. Meanwhile, supporters of customs de minimis reform are continuing to call for action through either changing the de minimis regulations or introducing new laws.

President Biden proposes tightened de minimis entry regulations

At the end of the Biden administration, on January 13 and January 17, 2025, CBP unveiled notices of proposed rulemaking (“NPRM”) for two significant reforms to the customs de minimis regulations. The first NPRM proposes to reform the entry filing process for de minimis entries, expanding import declaration requirements and strengthening enforcement (the “Entry NPRM”). The second NPRM proposes to exclude goods subject to certain tariff actions from using de minimis (the “Tariff Action NPRM”).

The Biden administration presented the two proposed rules as part of a plan to strengthen enforcement against imports of illegal and dangerous products, chiefly as a response to the rapid rise of Chinese e-commerce.¹⁰ In addition to the two NPRMs, the Consumer Products Safety Commission’s (“CPSC”) December 2024 final rule to implement eFiling of certificate of compliance information for imports of regulated consumer products was also presented as part of the de minimis reform plan, though it was under development before Biden took office.¹¹

Due to the timing of the NPRMs’ publication just before a presidential transition, the rulemaking process will likely be delayed while the incoming administration’s staff take their positions and review ongoing initiatives. While the actions in the two NPRMs have extensive bipartisan support, it is unclear whether the Trump administration would want to proceed with the exact approach set out by the Biden administration. 

NPRM on de minimis entry processes

On January 13, 2025, CBP announced the Entry NPRM.¹² This long-awaited package of enforcement and administrative reforms has been under development at CBP for several years. It is the first major proposed reform to the entry process for de minimis imports since the modern entry procedures were established in 1995. Unlike other reform proposals (and Trump’s de minimis suspensions), the Entry NPRM does not seek to exclude any imports from using de minimis. Instead, the reforms would seek to strengthen the existing enforcement process and improve CBP’s visibility. CBP believes the Entry NPRM’s reforms would improve automation, encourage compliance and make it easier for inspectors to profile and target higher-risk shipments. 

The Entry NPRM proposes to establish a new two-tiered entry system for de minimis imports, consisting of an “Enhanced Entry Process” and a “Basic Entry Process”:

• Enhanced Entry Process: Would create a new streamlined electronic filing process for entering de minimis shipments, which it calls the “Enhanced Entry Process.” Importers participating in this system would benefit from expedited customs clearance, assuming they can satisfy the compliance requirements. The proposed process builds on the current Section 321 Data Pilot and Entry Type 86 Test (“ET86”). Drawing from ET86, it would use an electronic filing system and include capacity for fulfilling Partner Government Agency (PGA) requirements. It would also incorporate new data elements that CBP studied in the Section 321 Data Pilot and has judged to be useful. Once the Enhanced Entry Process is adopted, CBP intends to retire ET86. All shipments that are subject to PGA requirements but still qualify for de minimis entry would be channeled through this new Enhanced Entry Process.
• Basic Entry Process: Would reform the current release from the manifest import process for de minimis shipments, redesignating it as the “Basic Entry Process.” This process would require importers to file several new data elements in addition to the individual bills of lading (or a manifest listing each bill of lading) and the currently required data elements. CBP intends to use the new data fields to improve enforcement of the $800 per day entry limit. Other than the new data elements, this proposed system generally maintains the current practices for release from manifest entries. Bona-fide gifts, which are subject to a separate set of de minimis requirements, would also enter through the Basic Entry Process.

The proposed rule also updates the specific procedures for postal entries and express consignment carriers:

• Postal de minimis entry: Qualifying de minimis shipments sent through the mail are passed to the USPS without standard US customs entry documents. Instead, CBP relies on information supplied in the mail documentation (usually, a simple customs declaration provided by the foreign post office and a statement of commercial value or invoice). The current method of entering postal de minimis shipments will remain in place under the Entry NPRM. The Entry NPRM also proposes to allow postal entries to use the Enhanced Entry Process as an alternative.
• Express consignment carriers: De minimis entries by express consignment carriers are managed through different regulations, under which the carriers provide manifest information prior to arrival of the cargo through a separate filing. The Entry NPRM makes several technical edits and minor changes to the required documents but does not change the overall process.

According to CBP, in 2023, 58 percent of de minimis entries used non-express consignment ET86 entry, 17 percent used express consignment with manifest entry, 16 percent used release from manifest, eight percent used postal entry, and one percent used express consignment ET86 entry. 

De minimis entry prohibition for Section 301, Section 232 and Section 201 tariff actions

On January 17, 2025, CBP announced the Tariff Action NPRM.¹³ The Tariff Action NPRM would prohibit imports from qualifying for de minimis entry (including postal de minimis entry) if the product is covered by a tariff action imposed under (i) Section 232 of the Trade Expansion Act, (ii) Section 201 of the Trade Act of 1974 (safeguards), or (iii) Section 301 of the Trade Act of 1974. Prohibiting these import shipments from de minimis entry would redirect them to either informal or formal entry, subjecting the shipments to the applicable tariffs and a more costly entry filing process.

At the time the Tariff Action NPRM was issued, the United States had in force a Section 301 tariff on imports from China; a Section 201 tariff on worldwide imports of solar cells and modules (which expires in February 2026); and Section 232 tariffs on imports of steel, aluminum and certain derivative products from most countries (which the Trump administration has since expanded). Prohibiting products subject to the China Section 301 tariff from de minimis would significantly curtail use of the entry process by e-commerce importers from China, since the tariff covers a wide variety of consumer goods and apparel. CBP estimates that about 77 percent of de minimis entries in 2023 would have been subject to Section 301, Section 232 or Section 201 tariffs under the Tariff Action NPRM’s process.

The Tariff Action NPRM also proposes to amend the Entry NPRM to require importers using the Basic Entry Process to provide HTSUS-10 tariff codes with entry filings. Though this requirement may create significant compliance costs for small retailers, CBP states that it is necessary to enforce the tariffs.

“Detect and Defeat” Counter-Fentanyl Proposal

In July 2024, the Biden administration issued policy statements on the de minimis reform debate, calling for Congress to pass reform measures the executive branch lacked the legal authority to implement through the planned NPRMs. The July 31, 2024, statement was largely motivated by a desire to strengthen enforcement against drug trafficking at US borders and customs checkpoints.¹⁴ Among the various initiatives in the announcement is a request that Congress provide CBP with “the tools they need to more effectively track and target the millions of small-dollar shipments that cross our borders every day—closing a loophole that drug traffickers exploit.” The legislation sought by the Biden administration would grant CBP more authority “to demand additional documentation and other information about de minimis packages and would impose a corresponding penalty on violators.” CBP expects the new documentation authorities would improve risk assessment and inspection targeting. President Biden also asked for the legislation to create a new user fee for importers using de minimis entry, which would help fund the new enforcement system. In September 2024, the Biden administration went further, calling for Congress to exclude import-sensitive products (including textile and apparel products) and products covered by Section 301, Section 201 or Section 232 from de minimis entry.¹⁵

Congress debates long-term changes

Congress is debating several proposals to limit use of the customs de minimis entry and reform its customs procedures, with some form of action possible in the next few years. Though there is bipartisan support for action, legislators have been unable to coalesce on a single approach despite several years of debate. The closest de minimis reform came to passing Congress was in the ill-fated trade policy title of the CHIPS and Science Act. Early versions of the bill in both the House and Senate contained de minimis reform provisions, among various other trade policy proposals. The trade policy title was dropped from the final CHIPS Act bill to speed passage of the popular semiconductor subsidies programs. 

House Ways & Means Republicans considering legislation resembling Biden proposal

On January 28, 2025, Rep. Greg Murphy (R-NC, member of the House Ways and Means Committee) reintroduced his End China’s De Minimis Abuse Act as H.R.805.¹⁶ The bill would establish new exceptions to de minimis entry for any product that would be subject to import restrictions under Section 201 (safeguards), Section 301 or Section 232 actions. Affected products would have to enter through standard channels and would become subject to any tariffs imposed under those Section 201, Section 301 or Section 232 actions. The bill also increases CBP’s enforcement powers with new civil penalties for violating de minimis entry rules and new data collection and data transparency rules. The bill's data collection requirements and de minimis prohibition on imports subject to special tariff actions is similar to the two NPRMs published by the Biden administration. The data sharing and enforcement provisions included in the bill are likely beyond CBP’s current legal authority. The similarities between Biden’s proposals and the Republican Ways and Means Committee’s proposals may point to a pathway for bipartisan action.

Rep. Murphy previously introduced the bill as H.R. 7979 in the 2023 – 2024 Congress.¹⁷ The House Ways and Means Committee approved the bill by a vote of 24 to 18 along partisan lines on April 17, 2024, making it the only de minimis reform bill that progressed past committee during the 2023 – 2024 Congress.

Other recent legislative proposals

Congress passing a bill that restricts use of de minimis even further than the proposal discussed above is also possible. Several bills that would exclude all goods from China or create global exclusions for import-sensitive consumer goods were introduced in the 2023 – 2024 Congress. The bills, which may re-emerge in the 2025 – 2026 Congress, include:

• The Import Security and Fairness Act, which would exclude shipments from China and Russia from qualifying for de minimis entry, create a new process for excluding designated companies from using de minimis entry, and require importers to file additional data fields when entering de minimis shipments.¹⁸ The bill was co-sponsored in the 2023 – 2024 Congress by Sen. Marco Rubio (R-FL), who is now Secretary of State.
• The De Minimis Reciprocity Act, which would establish new de minimis eligibility requirements for all countries, exclude shipments from China and Russia from qualifying for de minimis entry, limit the types of shipments that can qualify for de minimis treatment, establish a new system for setting reciprocal de minimis value thresholds, and require importers to file additional data fields when entering de minimis shipments.¹⁹ The bipartisan bill was co-sponsored in the 2023 – 2024 Congress by Sen. J.D. Vance (R-OH), who is now vice president.
• The Fighting Illicit Goods, Helping Trustworthy Importers, and Netting Gains (“FIGHTING”) for America Act would significantly reduce the types of goods that can qualify for de minimis entry, excluding products that are subject to Section 201, Section 301 and Section 232 tariffs, as well as excluding goods that are deemed ineligible for preferential treatment under the Generalized System of Preferences (which covers a broad range of textile, apparel and leather goods, among other items).²⁰ This compromise bill was proposed by Sen. Ron Wyden in late 2024 and combined various proposals for legislative reform with the administrative improvements requested by CBP and the Biden administration.²¹ Besides the product exclusions, the bill would add new data filing requirements, introduce new penalties for rule violations, create a streamlined process for disposing of detained de minimis shipments, and introduce a $2 user fee to fund the needed expansion of CBP’s workload. The bill’s enforcement provisions are similar to those Biden had sought in his “detect and defeat” proposal.

Companies with business models that rely on de minimis entry are carefully tracking legislative and executive activity in this area and considering alternative sales models. How supply chains evolve in light of these changes, remains to be seen. 

_{1 19 U.S.C. § 1321.
2 Executive Order of February 1, 2025: “Imposing Duties to Address the Synthetic Opioid Supply Chain in the People's Republic of China,” 90 FR 9121; and “Implementation of Additional Duties on Products of the People’s Republic of China Pursuant to the President’s 1 February 2025 Executive Order Imposing Duties to Address the Synthetic Opioid Supply Chain in the People’s Republic of China,” 90 FR 9038 (February 5, 2025).
3 Executive Order of February 1, 2025: “Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border;” and “Implementation of Additional Duties on Products of Canada Pursuant to the President’s 1 February 2025 Executive Order Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border” (withdrawn, originally published on February 5, 2025). 
4 Executive Order of February 1, 2025: “Imposing Duties to Address the Situation at Our Southern Border,” (DHS has not issued implementing guidance for the Mexico tariff order).
5 “China’s E-Commerce Exports and U.S. De Minimis Policies,” Congressional Research Service, February 3, 2025. 
6 “CSMS # 63992482 - GUIDANCE: ACE Processing of De Minimis Shipments Per Executive Orders issued February 1, 2025,” CBP, February 3, 2025.
7 “International inbound mail and packages from China and Hong Kong Posts,” USPS, February 5, 2025.
8 Executive Order of February 5, 2025: “Amendment to Duties Addressing the Synthetic Opioid Supply Chain in the People’s Republic of China” (issued on February 7, the order was later backdated to February 5).
9 Memorandum of January 20, 2025: “America First Trade Policy,” 90 FR 8471
10 “Biden-⁠Harris Administration Announces New Actions to Protect American Consumers, Workers, and Businesses by Cracking Down on De Minimis Shipments with Unsafe, Unfairly Traded Products,” White House (September 13, 2024).
11 “CPSC Approves Final Rule to Implement eFiling for Certificates of Compliance,” CPSC, December 18, 2024; “Certificates of Compliance,” (January 8, 2025); and see further information on the eFiling system on the CPSC website. 
12 “Entry of Low-Value Shipments,” 90 FR 3048 (January 14, 2025).
13 “Trade and National Security Actions and Low-Value Shipments,” 90 FR 6852 (January 21, 2025). 
14 “Biden-⁠Harris Administration Announces New Actions to Counter the Scourge of Fentanyl and Other Synthetic Drugs,” and “DHS Shows Results in the Fight to Cripple Cartels and Stop Fentanyl from Entering the U.S.” 
15 “Biden-⁠Harris Administration Announces New Actions to Protect American Consumers, Workers, and Businesses by Cracking Down on De Minimis Shipments with Unsafe, Unfairly Traded Products” White House (September 13, 2024).
16 H.R.805 - To amend section 321 of the Tariff Act of 1930 to modify the administrative exemptions under that Act, 119th Congress (2025-2026).
17 H.R.7979 - End China’s De Minimis Abuse Act, 118th Congress (2023-2024).
18 S.2004 - Import Security and Fairness Act, 118th Congress (2023-2024)
19 S.1969 - De Minimis Reciprocity Act of 2023, 118th Congress (2023-2024)
20 See, GSP-Eligible Products; see also, 19 U.S.C. 2463(b)(1) - Designation of eligible articles, for the list of import-sensitive products that are generally prohibited from qualifying for GSP.
21 S.5329 - FIGHTING for America Act of 2024, 118th Congress (2023-2024)}

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