The De Minimis Exemption Is Gone: What Dropshipping From China Costs Now

For most of the last decade, a parcel worth less than $800 could enter the United States without paying duty and with almost no paperwork. In fiscal year 2024, US Customs and Border Protection processed well over a billion of them, almost ten times as many as in 2015.

Cross-border dropshipping was built on that rule, and so were the American businesses of Temu and Shein: an order left a warehouse in China as a single parcel and paid nothing at the border, whatever tariff the same goods carried when they arrived by the container.

On August 29, 2025 the exemption was suspended for every country. According to the Universal Postal Union, postal traffic to the United States fell by four fifths compared with the week before, and nearly ninety national postal operators stopped some or all of their US-bound services.

Dropshipping from China survived the end of de minimis, with duty now inside the price of every unit. Two things that used to be afterthoughts became the decisions that set the margin: who pays the duty — you, or your buyer at the door — and where the stock is when the order arrives.

What was the de minimis exemption?

Section 321 of the Tariff Act of 1930 let goods worth $800 or less, imported by one person on one day, enter free of duty and tax with minimal paperwork. The limit was $200 until 2016, when Congress raised it to $800, and the volume took off from there.

For ecommerce, that meant the tariff on a product depended on how it travelled. The same item paid duty when it came in by the container and paid nothing when it came in one parcel at a time.

Is the de minimis exemption still in effect?

No, and there is no date to wait for.

Read the last row: even if every executive order were reversed, the statute ends the exemption in 2027.

The exemption ended for goods from China and Hong Kong on May 2, 2025, and was suspended for every other country on August 29, 2025.

On February 20, 2026 the Supreme Court ruled in Learning Resources v. Trump that the International Emergency Economic Powers Act does not allow the President to impose tariffs. The ruling struck down a large set of tariffs. It did not address the de minimis suspension, and the administration kept the suspension in place.

On June 24, 2026 CBP published two rules that write an indefinite suspension into its regulations: one for courier, freight and every route other than international mail, in force the same day, and one for mail, in force from July 24, 2026.

In August 2026 the Court of International Trade ruled on the suspension itself, in a case brought by the auto-parts seller Detroit Axle, and upheld it.

Behind all of it sits a statute. The One Big Beautiful Bill Act, signed on July 4, 2025, terminates the exemption on July 1, 2027.

Genuine personal gifts still have a separate exemption of their own. An order a buyer paid for is not a gift.

Will you pay tariffs on packages under $800?

Yes. Every commercial parcel now goes through a customs entry and pays the duty that applies to what it is and where it was made, however little it is worth.

Three things set that duty: the product's 10-digit tariff classification, its country of origin and its declared value. The layers stack. There is the ordinary rate for the classification. Goods from China also carry the Section 301 tariffs imposed on them in 2018 and 2019. And since July 24, 2026, a further Section 301 duty of 10% or 12.5% applies to goods from sixty economies, with China in the 12.5% group. The temporary global surcharge that replaced the struck-down tariffs in February expired on the same day.

How the duty is collected depends on the route.

Courier and express lines. A customs broker files the entry, and the duty is paid by whoever the shipping terms name: you, the shipping line on your behalf, or the buyer.

International mail. Since July 24, 2026, a postal entry can be filed only by the owner or purchaser of the goods or by a licensed customs broker. It has to list the 10-digit classification of every item, and the duty is paid to CBP monthly. Postal operators abroad have been adding tools to collect the duty from the sender before a parcel leaves.

DDP or DAP: who pays the duty?

The shipping terms answer the question the border now asks of every parcel.

DDP, delivered duty paid, makes the seller responsible for import clearance and duties. The buyer receives the parcel and owes nothing more, and the cost sits inside your price or your shipping line's rate.

DAP, delivered at place — in ecommerce often still called DDU — leaves import clearance and duties to the buyer, who is asked to pay them on delivery.

The International Chamber of Commerce, which writes these terms, describes the difference between the two as exactly one obligation: import clearance and the payment of duties. For a business importing a pallet, that is a clause in a contract. For a shopper who already paid the price on a listing, a bill at the door is a surprise, and surprised buyers refuse parcels and open cases, which land in the metrics that decide your account level.

So is DDP shipping worth it? For a dropshipper selling to consumers there is little real choice. The price on the listing has to be the whole price.

What it does to a dropshipping margin

Duty is a percentage of the declared value, so it bites a cheap product exactly as hard as an expensive one: a 12.5% layer adds $1.25 to a $10 item before any other duty applies. On a low-priced product, where a dropshipper's margin is counted in single dollars, that is a large share of the profit.

Add the rest of your landed cost — the supplier's price, shipping, clearance fees, returns — and compare it with what the product sells for today. The figures that changed are the ones a supplier's product page does not show: the duty for that classification and origin, and whether the shipping line you picked includes it.

Where the stock sits is now the pricing decision

An order reaches a US buyer in one of three ways now, and each one puts the duty somewhere different.

Read the test line under each band: every one of them is a question about a single product.

Shipping from China with the duty unpaid is still the cheapest quote on the supplier's page, and it hands the problem to your buyer. Shipping from China with the duty paid keeps the listing price honest and charges the duty on every parcel. Shipping from a US warehouse means the duty was paid once, when the stock came in bulk, and the parcel travels domestically.

The largest cross-border sellers moved first. When the exemption ended for Chinese goods in May 2025, Temu switched its US site to show only items stored in US warehouses and started recruiting US sellers.

The catch is that US stock is often thin. A folding phone holder we looked up in a large dropshipping supplier's catalog had tens of thousands of units in China and a few dozen in its US warehouse — enough to test a product, and nowhere near enough for one that takes off.

Is dropshipping dead in 2026?

The version built on a duty-free parcel from China is gone, and the statute rules it out from July 2027 whatever happens to the executive orders.

What still works is dropshipping where the duty is inside the price, where the stock sits in the buyer's country, or where the product carries enough margin to absorb the duty and still compete. That is a narrower set of products than in 2024, and every product in it has to be checked on its own, because the duty depends on what the item is and where it was made.

Checking that product by product on a supplier's website is slow. SellerClaw is a team of AI agents that connects to the stores you already sell on and to suppliers such as CJ Dropshipping, and you talk to it in a chat, with nothing to install. Ask it for products that ship from a US warehouse, and it filters the supplier's catalog by warehouse country, shows how many units sit in each country, and quotes shipping to a US zip code from the cheapest warehouse that has the item.

One limit is worth knowing before you price. The price SellerClaw works out is the supplier's cost plus shipping, with each store's own markup on top. Duty is not part of that sum, so for products that ship from China the markup you set has to cover it.

The border stopped being free, and the rule that made it free ends by law in 2027. The dropshippers who come through it are the ones who know, for each product, who pays the duty and where the stock is. Connect your store and your supplier to SellerClaw and ask which of your products can ship from a US warehouse — the first month of a plan costs about a dollar.