Companies impacted by the end of the de minimis exemption

For years, the U.S. de minimis exemption acted as a hidden subsidy for global e-commerce. By allowing goods valued less than $800 to enter the U.S. duty-free, it enabled retailers and platforms to ship small parcels directly to consumers without paying tariffs or enduring lengthy customs clearance.

But on August 29, 2025, the White House suspended de minimis for all countries, extending a restriction already imposed on China and Hong Kong earlier in the year. Since then, a series of companies have publicly detailed just how vital the de minimis exemption was to their growth — and how damaging its removal has become. Here’s a list of companies that have publicly announced the impact of the removal of the de minimis rule. But let’s first understand what the de minimis rule is.

The concept of de minimis in U.S. trade law dates back nearly a century. It was first introduced in the 1930s, as the country reeled from the Great Depression and sought ways to simplify customs procedures for low-value imports. The idea was straightforward: for goods below a certain threshold, the government would waive duties and fast-track clearance, saving both businesses and Customs officials from the cost and hassle of processing trivial shipments.

Over the decades, that threshold steadily expanded. It began at just $1, was raised to $5 in 1990, jumped to $200 in 1993, and was increased again a decade ago to $800, according to a government summary. Each increase reflected Washington’s efforts to open up global trade, cut red tape, and promote consumer access to international goods.

Lululemon had long relied on de minimis as a cushion against U.S. tariffs. Many of its accessories and apparel items, often priced below $800, entered duty-free, softening the blow from broader trade tensions. Once that exemption disappeared, the company faced immediate exposure on nearly every small parcel shipped into its largest market.

In its September 2025 earnings call, CFO Meghan Frank admitted that the removal of de minimis was a central reason for lowering guidance. Lululemon quantified the damage at $240 million in lost gross profit for 2025, net of mitigation measures, with the burden expected to grow to $320 million in 2026 as tariffs fully annualize. Frank was direct: “The increased rates and removal of the de minimis exemption have played a large part in our guidance reduction for the year.” For a company whose U.S. sales topped $6.5 billion in 2024, this is not a marginal adjustment but a direct hit to profitability.

Tapestry, parent company of Coach and Kate Spade, also leaned on de minimis to keep import costs in check. Handbags, wallets, and footwear — often priced under $800 per unit — flowed through duty-free, allowing Tapestry to protect gross margins even as it expanded sourcing in Asia.

When the rule ended, the effect was immediate. In its August 2025 earnings update, the company projected $160 million in tariff and duty costs for fiscal 2026, with roughly one-third of that directly tied to the elimination of de minimis. CFO Scott Roe called the impact “greater than previously expected,” and analysts singled out Kate Spade as particularly exposed, given its reliance on the U.S. market and mid-tier price points. The change has forced Tapestry to accelerate nearshoring initiatives and adjust retail pricing — a direct reversal of the competitive advantage de minimis once offered.

No company illustrates the reliance on de minimis more starkly than Ssense, the Canadian luxury e-commerce retailer. The platform specialized in shipping single designer pieces — sneakers, jackets, handbags — directly from Montreal to U.S. consumers. With more than 60% of its sales historically tied to the U.S. and many orders falling under the $800 threshold, de minimis was the backbone of its model.

When the exemption disappeared, that backbone collapsed. Suddenly, those shipments faced duties, customs delays, and higher landed costs that stripped away Ssense’s price competitiveness. In September 2025, the company entered bankruptcy protection, explicitly citing the removal of de minimis as a decisive factor. What had once been a strategic advantage — cheap and frictionless entry into the U.S. — became a liability overnight.

For eBay, de minimis was less about its own financials and more about enabling the global liquidity of its marketplace. Collectibles, refurbished electronics, and niche inventory could move freely into the U.S. without tariffs, connecting buyers to small sellers worldwide.

When the policy ended, eBay moved quickly to warn of disruption. On its July 2025 earnings call, CEO Jamie Iannone flagged the rule’s suspension as a potential revenue risk and confirmed that eBay had urged U.S. Customs to reconsider. The company also built safeguards for sellers: forgiving late shipments tied to customs delays, removing negative feedback linked to duty issues, and publishing detailed tariff guidance. In short, de minimis had been an invisible lubricant for eBay’s global marketplace, and its removal threatens both buyer trust and seller economics. Following the August 29, 2025 announcement, eBay’s shares fell about 2.4% on the day and nearly 6% over the week, reflecting concerns about reduced cross-border sales.

Like eBay, Etsy relied on de minimis to empower its global network of artisans. Many sellers in Europe and Asia could ship unique handcrafted goods to U.S. buyers without worrying about tariffs inflating costs. Buyers benefited from predictable prices, while sellers enjoyed hassle-free market access.

In August 2025, Etsy issued a formal Seller Handbook update, warning that all U.S. shipments — regardless of value — may now face duties. The company stressed that many American buyers had never before been charged tariffs on Etsy purchases, raising the risk of sticker shock and abandoned carts. With 5.6 million active sellers, Etsy’s challenge is not direct financial exposure but preserving buyer confidence and seller satisfaction in a post-de minimis world.

Of all the Chinese fast-fashion players, Shein may have leaned most heavily on de minimis. With most of its products priced under $50, nearly every order entered the U.S. duty-free. The exemption wasn’t just helpful — it was existential, allowing Shein to undercut domestic competitors on price.

When the exemption was removed for China in early 2025, Shein admitted the pressure. In a February 2025 investor letter, Executive Chairman Donald Tang wrote: “Our growth remains resilient despite the United States ending duty-free treatment of low-value e-commerce packages from China.” Behind the optimism, Shein has poured investment into logistics and supply chain optimization to absorb costs. Still, the loss of de minimis fundamentally raises its cost base in the U.S., forcing price increases that could erode its ultra-low-cost appeal.

Temu, owned by PDD Holdings, is perhaps the clearest example of adaptation. Its meteoric rise was built on ultra-cheap, cross-border parcels shipped directly from China under de minimis protection. Once the exemption was withdrawn, that model no longer worked.

By May 2025, Temu announced a full pivot: all U.S. sales would now be handled by locally based sellers and fulfilled from within the country. The company also restricted the display of China-shipped items to U.S. buyers, effectively abandoning its original cross-border framework. In doing so, Temu admitted — without directly stating so — that de minimis had been the cornerstone of its business, and without it, survival would require reinvention as a domestic marketplace.

Even companies outside of retail are feeling the squeeze. Adyen, the Dutch payments processor, warned in August 2025 that the de minimis suspension was reducing volumes from Asia-Pacific merchants shipping to the U.S. These were high-growth clients who had leaned on duty-free entry to scale quickly.

Adyen cut its revenue guidance and saw its stock fall nearly 20% in a single day, underscoring how the policy change reverberates beyond merchants to financial infrastructure. As CEO, Ingo Uytdehaage explained, fewer low-value parcels mean fewer cross-border transactions to process, a clear case of collateral damage from a trade policy change.

The logistics giants FedEx and UPS haven’t directly issued warnings, but analysts have connected the dots. In mid-2025, Bank of America downgraded both stocks, citing expected volume declines and margin pressure as the de minimis ended.

Against that backdrop, BofA analysts expressed concern about the fallout for package-delivery giants FedEx (FDX +0.59%) and United Parcel Service Inc. (UPS +1.38%), highlighting how much of their cross-border parcel growth had been built on duty-free shipments. With those small parcels now subject to tariffs and delays, demand from major e-commerce clients is expected to soften, posing yet another headwind to their growth outlook.

No two companies exploited the U.S. de minimis exemption more aggressively than Shein and Temu. The rule, originally intended to ease customs processing for small, personal imports, became the foundation of their U.S. strategy: flood the market with millions of ultra-low-cost parcels, each valued under $800, and let them slip in duty-free.

The scale was staggering. By 2023, U.S. Customs processed more than 1 billion packages a year under de minimis — up from just 134 million in 2015. Nearly 3 million parcels arrive from China every day, and congressional investigators estimated that Shein and Temu alone account for over 30% of those shipments. These weren’t hobbyist sellers mailing gifts; they were multi-billion-dollar companies using a customs shortcut to bypass tariffs that U.S. retailers had to pay.

The end of de minimis has not only forced retailers to rethink their business models — it has also disrupted the global postal system itself. Early this month, the Universal Postal Union (UPU), a U.N. agency that coordinates cooperation among 192 national postal carriers, reported that postal traffic to the United States plunged by 81% on August 29 compared with just a week earlier.

The reason was operational chaos. For the first time, the new U.S. rules placed the burden of customs duty collection and remittance on either the transportation carriers themselves or on U.S. Customs and Border Protection–approved qualified parties. Airlines and carriers quickly signaled they were unwilling — or unable — to take on this responsibility, while many postal operators had not yet built the necessary links to CBP’s approved systems.

The fallout was immediate: 88 international postal operators suspended at least some services to the U.S., leaving consumers and businesses stranded. The UPU said it is now scrambling to help operators adapt, offering tools to calculate and transmit the new costs.

This episode underscores how deeply embedded de minimis had become in the fabric of global commerce. Its removal didn’t just raise costs for e-commerce giants like Shein and Temu — it temporarily brought the world’s postal arteries to a near standstill.