The De Minimis Exemption Has Ended: Understanding the Impact on Supply Chains

Section 321 of the Tariff Act (i.e., the de minimis exemption), which ended on August 29, 2025, allowed goods valued at $800 or less to enter the United States duty free and exempt from tariffs, creating an ideal opportunity for cross-border commerce, particularly for companies with narrow profit margins. Now that it has been repealed, approximately 4 million packages per day will be subject to tariffs, meaning that companies must quickly adjust their supply chain strategies to minimize additional costs and shipment delays.

Understanding the Implications

For shippers, the stakes are high. Particularly for those shipping low-cost goods who rely on high volume for profitability, these items are now taxable, which will have a drastic impact on their ability to sell based on value, as most will have to pass along all or part of the additional costs to consumers. Companies will also be subject to greater administrative burdens due to the paperwork and documentation that must be provided for formal customs entry, translating into longer transit times and slower deliveries for customers.

While shippers of all sizes will feel the impacts, the higher costs and added complexity will likely hit small companies the hardest, as their prices will most likely have to increase to offset the tariffs, and many do not have the resources available to handle the administrative burden of maintaining cross-border commerce. Companies must adjust their operations to ensure they comply with the requirements for legal entry or risk fines and delays for noncompliance.

How Companies Are Coping

Companies are working to mitigate the impacts of the Section 321 repeal in a number of ways, all of which will require operational adjustments.

• The most common solution for many companies will be to pass along the costs of tariffs to consumers, which will raise prices and likely impact their competitive positioning in the market.

• Midsized and larger businesses may look to onshore inventory with U.S.-based warehousing and fulfillment to minimize shipment delays.

• Many companies are seeking third-party support to navigate the complexity around compliance and operations due to limited resources, as well as for solutions that will have the least negative impact on their bottom line.

Regardless of the size of the company or scope of impact of the additional tariffs, many will be charting new territory when it comes to understanding the new customs requirements, maintaining compliance, managing duty filings, completing complex documentation and understanding tariff classification — all while working to avoid costly errors that could further delay shipments.

Reducing Complexity With a 3PL Partner

With so many unknown variables and often limited resources to manage them, choosing a trusted 3PL partner to assist in the transition is proving beneficial for many companies. In addition to addressing the administrative complexities, 3PLs are well positioned to help companies build more flexible networks to offset some of the financial burden while setting them up for long-term growth and scalability.

A few ways 3PLs can help include:

• Creating strategic onshore warehousing alternatives for storing goods to help sidestep customs and allow for faster fulfillment from U.S. facilities

• Offering Foreign-Trade Zone or customs-bonded warehousing space to delay or defer tariff obligations

• Building a flexible network of ideal warehousing, fulfillment and distribution operations to help cut costs and optimize delivery while hedging against future policy shifts

• Enhancing customs compliance and abiding by all regulations to eliminate errors, which can result in costly delays and penalties

• Experience and expertise to help shippers negotiate better rates, optimize routing and more effectively manage inventory

• Building long-term stability that can flex with demand in a shifting landscape

If your organization is struggling to adapt to the new requirements, you don’t have to navigate the complexity alone. Brands that act quickly stand to experience less financial and operational impact, and working with a trusted partner can help to ensure that your organization remains compliant without having to dedicate new or existing resources to focus on the administrative complexity. By addressing these changes now, shippers can ensure they are set up for success for the upcoming peak season and beyond.

Don’t let unexpected costs and shipment delays negatively impact your brand. If you have questions about how to create a strategy for compliance and cost control that can remove the administrative burden, reach out to the NXTPoint Logistics team today.