E-Commerce and the De Minimis Threshold: Section 321 Changes Importers Must Know

What Is the De Minimis Threshold?

Section 321 of the Tariff Act of 1930 establishes the de minimis threshold, which allows goods valued at or below a specified amount to enter the United States duty-free and without formal customs entry. In 2016, Congress raised the de minimis threshold from $200 to $800, significantly expanding the value of goods that can enter the US without any duty payment. This change, combined with the explosion of cross-border e-commerce, has created a massive channel for duty-free imports that now accounts for over one billion shipments per year entering the US.

The de minimis provision was originally intended to reduce the administrative burden on both CBP and importers for low-value shipments. However, the scale of Section 321 usage has grown far beyond what was contemplated when the threshold was raised. Companies like Shein, Temu, and other direct-to-consumer e-commerce platforms have built business models that leverage the de minimis threshold to ship individual orders directly from overseas factories to US consumers without paying customs duties. This has raised concerns about lost tariff revenue, competitive disadvantage for US-based retailers, and the inability to screen these shipments for safety, intellectual property, and forced labor compliance.

The Scale of De Minimis Imports

• Over 1 billion Section 321 shipments entered the US in 2025, up from approximately 140 million in 2015
• An estimated 60-70% of de minimis shipments originate from China
• These shipments bypass Section 301 tariffs, AD/CVD duties, and other trade remedies
• CBP can physically inspect less than 1% of de minimis shipments
• The estimated annual tariff revenue foregone exceeds $10 billion
• Products range from apparel and accessories to electronics, cosmetics, and household goods

Proposed Reforms and Legislative Action

Multiple legislative proposals have been introduced to reform or restrict the de minimis provision. The most prominent proposals include: reducing the threshold from $800 to $200 or even lower, excluding goods from countries subject to Section 301 tariffs (effectively China) from de minimis eligibility, requiring additional data elements for de minimis shipments (including the 10-digit HTS code, country of origin, and manufacturer information), and applying UFLPA requirements to de minimis shipments. Executive action has also been taken, with CBP implementing new data collection requirements for Section 321 shipments and announcing plans for enhanced screening of de minimis cargo.

Impact on E-Commerce Business Models

Reforms to the de minimis threshold would fundamentally alter the economics of direct-from-factory e-commerce. Companies that currently ship individual orders from China to US consumers duty-free would face new duty obligations, potentially adding 10-50% to their landed costs depending on the product category. This could shift the competitive landscape in favor of US-based retailers and e-commerce fulfillment models that import goods in bulk (paying duties at the time of entry) and then ship domestically. Companies relying heavily on de minimis should develop contingency plans that account for potential threshold reductions and product exclusions.

Compliance Considerations for De Minimis Shipments

Even under the current $800 threshold, de minimis shipments are not entirely exempt from regulation. The goods must still comply with all US laws and regulations, including product safety standards, intellectual property rights, FDA requirements for food and medical products, and CPSC requirements for consumer products. CBP has the authority to examine any de minimis shipment and can refuse entry if the goods are prohibited, improperly described, or in violation of any applicable law. Additionally, the de minimis provision does not apply to goods subject to quotas, visa requirements, or certain other trade restrictions.

Preparing for the New Normal

Whether you are a large e-commerce platform or a small online seller importing products for resale, preparing for de minimis reform is prudent. Start by understanding your current reliance on Section 321: what percentage of your imports enter under de minimis, what would the duty cost be if you had to make formal entries, and how would that affect your pricing and margins? Evaluate alternative fulfillment models such as bulk importation with domestic distribution, bonded warehouse operations, and FTZ utilization. Invest in HTS classification for your products now, so you are ready to file formal entries if and when the threshold is reduced or your products are excluded from de minimis eligibility.