New Import Taxes Explained: What Small Businesses Must Do

If you’ve ever relied on affordable overseas products to keep your shelves stocked or your customers happy, you’ve benefited from the U.S. de minimis rule—even if you didn’t know it.

Understanding the Change in the De Minimis Rule

The term de minimis (Latin for “about minimal things”) refers to a customs exemption that lets low-value imports enter the U.S. duty-free and with minimal paperwork. Since 2016, the threshold has been set at $800—one of the highest in the world.

This exemption became a backbone of modern e-commerce. It’s what allowed small parcels from overseas to ship directly to U.S. customers without complicated customs filings. For small businesses, it opened the door to direct-to-consumer models that kept costs low and logistics simple.

But starting August 29, 2025, that exemption disappears.

Every shipment, no matter how small, will now face tariffs or transitional fees at the border. These new import taxes will directly affect the way small businesses manage costs and fulfillment. For business owners, this means higher costs, new paperwork, and a critical decision: how do you protect your margins in a new era of global trade?

Why the Government Pulled the Plug

The government estimates that the de minimis loophole cost billions of dollars a year in lost tariff revenue. In 2024 alone, over 1.36 billion parcels came into the U.S. duty-free, many from platforms like Shein and Temu.

Beyond lost revenue, the loophole was also blamed for:

• Customs enforcement challenges (nearly 90% of seizures were de minimis shipments).

• Tariff evasion by large-scale importers splitting shipments to avoid duties.

• Unfair competition against U.S.-based manufacturers and sellers.

These concerns were central to the decision to end the exemption.

What Small Business Owners Can Do About New Import Taxes

The good news: small businesses are flexible, scrappy, and capable of turning challenges into opportunities. Here are the five things you should be considering right now:

1. Reevaluate Your Import Strategy

If you’re drop-shipping or sending products one-by-one from overseas suppliers, those days are over. Shift to bulk importing instead:

• Import in larger quantities to the U.S. at once.

• Pay duties once, rather than on every parcel.

• Use U.S.-based fulfillment centers (Amazon FBA, ShipBob, Deliverr) for final distribution.

2. Compare Overseas vs. Domestic Suppliers

This is the time to do a side-by-side cost analysis:

• Keep your overseas supplier and pay the new tariffs.

• Or switch to a U.S. supplier at a higher base price but with faster, simpler fulfillment.The math might surprise you. For some products, paying tariffs may still make sense. For others, a domestic vendor could be the smarter long-term play.

3. Understand Your Margins at a Deeper Level

You can’t make smart decisions if you don’t know your numbers. Ask:

• How much will the new duties increase your cost of goods sold (COGS)?

• What’s your true profit margin after this change?

• Can you raise retail prices without losing customers, or do you need to offset costs elsewhere?

4. Look for Offset Opportunities

If margins tighten on certain products, consider where you can recoup that loss:

• Can you bundle products to increase average order value?

• Can you raise prices selectively (for higher-end or inelastic items)?

• Can you trim costs in packaging, shipping, or marketing spend?

Margins are like a puzzle—if one piece shifts, you can adjust the others.

5. Diversify Your Product Centers

Don’t let your business live or die on a single product line that’s about to get pricier. Explore:

• New categories with better profit margins.

• Made in USA products that give you a marketing advantage.

• Nearshoring options (Mexico, Central America) that lower shipping and tariff risks.

The more diverse your product mix, the less vulnerable you are to any single change in policy.

Closing Thoughts

Yes, the end of the de minimis rule is disruptive. For some, it’s going to hurt. But for small business owners who move quickly, it’s also a chance to tighten operations, sharpen strategy, and build more resilient businesses.

The businesses that win will be the ones that stop hoping for exemptions and start making informed, margin-focused decisions today.

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