If you operate an e-commerce business, you are probably aware that recent changes to U.S. trade regulations are reshaping how international businesses operate. Specifically, updates to the de minimis trade exemption—a provision that previously allowed duty-free imports for goods valued under $800—are creating new challenges for Chinese e-commerce businesses serving American consumers. These changes, coupled with new tariffs and stricter customs requirements, make U.S.-based order fulfillment is a more strategic option than ever before.
Let’s review the recent changes to the de minimis exemption, their implications for Chinese e-commerce businesses, and why partnering with a U.S.-based fulfillment provider like ShipWizard can help businesses adapt to this new reality.
What is the De Minimis Trade Exemption?
The de minimis trade exemption, established under Section 321 of the Tariff Act of 1930, allows goods valued at $800 or less to enter the United States duty-free and tax-free. This exemption has been a cornerstone for international e-commerce businesses, particularly those in China, enabling them to ship low-cost goods directly to American consumers without incurring additional costs.
However, as of early 2025, significant changes have been introduced to the de minimis exemption:
- Proposed Restrictions: On January 21, 2025, U.S. Customs and Border Protection (CBP) announced plans to narrow the scope of the de minimis exemption. Key proposed changes include:
- Excluding shipments subject to tariffs under Section 201, Section 232, or Section 301 (which often apply to Chinese goods) from qualifying for the exemption.
- Requiring a detailed 10-digit Harmonized Tariff Schedule (HTSUS) classification for all shipments claiming the de minimis exemption.
- Executive Action: In February 2025, President Trump initially announced the suspension of the de minimis exemption for small packages from China as part of broader tariff measures. However:
- On February 7, 2025, an executive order temporarily reinstated the exemption for small packages from China.
- This reinstatement is conditional and will be revoked once systems are in place to efficiently process and collect tariff revenue on these items.
These changes aim to address concerns about unfair trade practices and ensure compliance with U.S. trade laws. However, they create significant hurdles for Chinese e-commerce businesses that have relied on the de minimis exemption to remain competitive in the U.S. market. This change is predicted to have a particularly negative impact on bargain sites such as Shein and Temu.
Why U.S.-Based E-Commerce Fulfillment is Now a Better Option
For Chinese e-commerce businesses targeting American consumers, transitioning to a U.S.-based fulfillment model offers numerous advantages in light of these regulatory changes:
1. Lower Duties for Bulk Orders
By storing inventory in U.S.-based warehouses, businesses can import goods in bulk and clear customs once—avoiding duties on individual shipments valued under $800.
2. Faster Delivery Times
Shipping directly from China often takes 7–14 days or more. In contrast, using a U.S.-based fulfillment center enables faster delivery times (as quick as two business days with ShipWizard 3PL), meeting consumer expectations shaped by giants like Amazon.
3. Improved Customer Satisfaction
U.S.-based fulfillment operations generally lead to greater customer satisfaction due to faster delivery times, better communication regarding order status and easier returns processes.
4. Simplified Returns
Returns are a huge part of e-commerce but can be costly and inefficient when managed internationally. A U.S.-based fulfillment partner like ShipWizard provides comprehensive reverse
logistics solutions that make returns easy for both businesses and customers.
5. Scalability
As demand grows, having inventory stored domestically allows businesses to scale operations up or down without worrying about long lead times or fluctuating international shipping costs.
How ShipWizard Handles U.S. Fulfillment For Overseas Merchants
ShipWizard is a leading third-party logistics (3PL) provider specializing in helping international sellers succeed in the U.S. market. For Chinese e-commerce businesses navigating the challenges posed by recent regulatory changes, ShipWizard offers comprehensive fulfillment solutions designed to simplify operations and reduce costs.
Our services and solutions include:
- Comprehensive Fulfillment Services: From inventory management to order processing and shipping, ShipWizard handles all aspects of fulfillment so you can focus on growing your business.
- Real-Time Reporting: Our dynamic dashboards provide insights into orders, inventory levels, and sales trends—empowering you with data-driven decision-making tools.
- End-to-end Returns Management: We offer cost-effective reverse logistics solutions that make returns hassle-free for your customers.
- FDA-Registered Facilities: For sellers in specialized industries like supplements or cosmetics, our FDA-certified warehouses ensure compliance with regulatory standards.
- Temperature Controlled Warehouses: Your nutraceuticals, cosmetics, or personal care products could suffer spoilage from an insufficiently temperature-controlled warehouse. Our Phoenix AZ 3PL facility is fully air-conditioned, which means you don’t have to worry about fluctuating temperatures or humidity levels while your inventory is stored and prepared for shipment.
The Future of E-Commerce Fulfillment
The recent changes to the de minimis trade exemption mark a turning point for international e-commerce businesses targeting the U.S. market. For overseas sellers accustomed to leveraging duty-free thresholds for low-cost goods, it’s time to adopt new logistics strategies and stay as flexible as possible.
By partnering with a trusted 3PL provider like ShipWizard, you can overcome these challenges while enjoying additional benefits such as faster delivery times, greater customer satisfaction, and secure and temperature controlled warehousing — all critical factors for winning in the competitive game of e-commerce.
If you’re ready to future-proof your business and take advantage of U.S.-based fulfillment solutions tailored specifically for international sellers, contact ShipWizard today! Let us help you navigate these changes and position your business for long-term success in the evolving global economy.
