The United States Postal Service said Tuesday that it would no longer accept imported parcels coming from China and Hong Kong, though by Wednesday morning the organization did an about-face, saying it would continue to process such packages.

While USPS didn’t explicitly say so, analysts noted that a key reason for the temporary suspension was tied to new tariff-related initiatives from President Donald Trump – namely, his suspension of the de minimis exemption loophole.

Indeed, it appears the potential fallout from the “de minimis” suspension could cause “de maximum” headaches for some e-commerce companies, including Amazon and China-based Temu and Shein, as well as U.S. border agents and even some promotional products importers, depending on how things ultimately play out. Here’s a breakdown of what’s in play.

De Minimis Exemptions Explained & Where Things Stand

In the United States, the de minimis duty exemption has provided a loophole in which so-called low-value shipments – those with retail values below $800 per person per day – aren’t slapped with import tariffs.

As ASI Media reported in January, U.S. Customs and Border Protection (CBP) has been keen to close the loophole. CBP has proposed a rule that would eliminate the exemption for imports subject to 201, 232 and 301 tariffs, saying that doing so is in the interest of national security and pivotal to safeguarding American businesses and workers from unfair trade practices.

New #tariffs announced yesterday on China, Canada and Mexico. Here’s what it could mean for the #promoprducts industry. https://t.co/8ZgsIhfLDs

— Chris Ruvo (@ChrisR_ASI) February 2, 2025

CBP’s proposed rule hasn’t been finalized yet and remains in a public comment period. Still, President Trump pre-empted CBP’s rule-making process to a degree when he signed executive orders over the weekend that axed the de minimis exemptions for imports coming from China, Canada and Mexico as part of his grander initiative that heightened tariffs against those nations.

The new 10% tariffs against China that are in addition to pre-existing levies on that country remain in place, as does the suspension of the de minimis exemption for Chinese imports. Trump stayed the implementation of new 25% tariffs on Canada and Mexico until at least March 1. It wasn’t entirely clear if the de minimis exemption for those nations was suspended, too. It appeared to be though: ASI Media contacted CBP for clarification and was referred to a notice indicating the pause on duties.

All aboard the #tariff rollercoaster ~ #Promoproducts executives are encouraged by the suspension of import tariffs on Canada & Mexico, but say levies that went into effect on China still stand to propel price increases in promo if left in place. https://t.co/2Wt9hoTETp

— Chris Ruvo (@ChrisR_ASI) February 4, 2025

The Wall Street Journal noted that Trump’s executive order on the de minimis loophole as it pertains to China (and potentially Canada and Mexico down the line) could complicate the CBP’s rule-making process and possibly face legal challenges. Trade lawyers told WSJ that it appears legal for Trump to make certain changes to de minimis rules through executive order. However, a blanket removal of the provision would require congressional action, Greg Husisian, a partner in law firm Foley & Lardner, told the media outlet.

Still, it’s clear the de minimis exemption remains in the crosshairs of federal authorities. The Trump administration and CBP have said nixing the exception will help border agents better protect against the inflow of illicit drugs, counterfeit goods and other illegal items.

It will also help prevent China-based e-commerce behemoths like Temu and Shein from exploiting the loophole to ship direct to U.S.-based consumers without paying tariffs – something they’ve done in ever-escalating quantities in recent years. To wit: In fiscal year 2024, total shipments to the U.S. claiming the de minimis exception tallied a total value of $1.36 billion, up approximately 880% from fiscal year 2015, according to CBP.

“This exponential increase has created challenges for CBP’s effective enforcement of U.S. trade laws, health and safety requirements, intellectual property rights, and consumer protection rules,” CBP said.

Potential Challenges for Promo

Promo leaders told ASI Media that the elimination of the de minimis exemption stands to affect certain types of industry importing efforts, including if the exception is abolished for Canada and Mexico.

“The potential suspension of the de minimis rule could certainly impact suppliers that ship small orders or samples directly from Canada [or Mexico] to U.S. customers, as those shipments would now be subject to tariffs regardless of value,” Samantha Kates, president of Canada-based Counselor Top 40 supplier Spector & Co. (asi/88660), told ASI Media. “This change could lead to increased costs and logistical challenges for many in the industry.”

$1.36 Billion
Value of imported shipments claiming the de minimis exception in fiscal year 2024.(CBP)

Kates noted that Spector has structured operations to mitigate cost burdens for clients. “All products shipped to our U.S. customers have already cleared customs and had any applicable duties paid, ensuring that our customers won’t face unexpected tariff costs on their orders or samples,” she said.

Promo supply chain executives have also noted that some suppliers and distributors that import direct use the de minimis exemption on smaller batch/custom orders coming from China. Such import orders are now subject to the full brunt of tariffs on China-made goods. That makes such shipments costlier, and promo importers may have to price accordingly to maintain desired margins.

“There are some suppliers who ship small-value orders direct from China to avoid the tariffs,” shared Yuhling Lu, CEO/co-owner of Counselor Top 40 supplier Ariel Premium Supply (asi/36730).

Nearly
880%
Increase in the value of imported shipments claiming the de minimis exception between fiscal year 2015 and fiscal year 2024.(CBP)

Even so, promo executives opined that the elimination of the de minimis exemption, even if it’s broadly applied to imports, probably won’t have a massive impact on promo sourcing for most U.S.-based suppliers. That’s because these firms tend to import their core stock items in larger quantities and don’t look to use the de minimis rule much beyond specialty orders.

“This duty exception is very helpful for e-commerce companies that ship direct from factory to consumer, like Amazon and Shein, but for our industry the model is not quite as applicable,” Pat Noonan, chief product officer at Counselor Top 40 supplier SanMar (asi/84863), told ASI Media.

Tough To Enforce

With the de minimis exemption disappearing for China and possibly for other nations too, some analysts said it will be difficult for entities like CBP and USPS to enforce.

CNN Business reported that USPS would need time to figure out how to execute the new taxes on Chinese packages, for instance. “This is a significant challenge for them because there were 4 million de minimis packages per day in 2024, and it is difficult to check all the packages – so it will take time,” Morningstar Senior Equity Analyst Chelsey Tam wrote in a research note.

“At a practical level, it’s nearly impossible” to implement, Christine McDaniel, a senior research fellow at George Mason University’s Mercatus Center, told CNN.

Officials said they plan to do their best.

“The USPS and Customs and Border Protection are working closely together to implement an efficient collection mechanism for the new China tariffs to ensure the least disruption to package delivery,” the Postal Service said in a statement.