D-DAY USA - Cross Border e-Commerce Changes Forever ... 28th Aug 2025

The Day U.S. Cross-Border E-Commerce Changes Forever

End of the U.S. Duty-Free Threshold: What B2C Retailers Need to Know from August 29, 2025

From August 29, 2025, the United States will eliminate its long-standing de minimis duty exemption for commercial imports. This change will have sweeping consequences for retailers, customers, and logistics providers alike — fundamentally reshaping the way cross-border e-commerce operates into the U.S.

The Change in Brief

Before August 29, 2025

• Shipments valued at USD $800 or less could enter the U.S. duty-free under the de minimis rule (unless originating from China or Hong Kong, which were already excluded).

• This allowed many overseas B2C retailers to ship small orders directly to U.S. customers with minimal friction — no duties, fast clearance, and low compliance costs.

From August 29, 2025 Onwards

• The duty threshold becomes zero for all commercial shipments, regardless of value or origin.

• Every shipment will require:

  1. Formal customs entry

  2. Applicable duties and taxes

  3. A Customs Power of Attorney (POA) from every customer if a broker or carrier is clearing goods on the customers behalf.

• For postal shipments (e.g., USPS inbound mail), a temporary flat duty fee may apply for six months before moving to a percentage-based of value (ad valorem) tariff model.

• For courier shipments (FedEx, UPS, DHL), duties will be assessed according to the Harmonized Tariff Schedule (HTSUS) from day one.

Impact on B2C Retailers

1. Increased Costs & Pricing AdjustmentsRetailers will need to decide whether to:

• Pass new duties and brokerage fees directly to customers, or

• Absorb some costs to remain competitive.

2. Operational & Compliance Changes

• Accurate HS/HTS codes, country-of-origin details, and item values must be included with every shipment.

• More robust documentation processes will be required to avoid clearance delays.

3. Rethinking Fulfilment Strategies

• Using U.S.-based fulfilment centers or duty-paid shipping models (DDP) could help mitigate friction.

• Retailers may bundle orders to reduce per-item duty processing fees.

4. Customer CommunicationClear messaging about duties, delivery times, and total landed costs will become critical to reduce cart abandonment and disputes.

Impact on Your Customers

1. Higher Landed CostsEven small purchases will now be subject to duties and taxes, which may surprise customers accustomed to duty-free shopping.

2. Longer Delivery TimesFormal customs clearance will add processing time — especially during the transition period when systems and processes are adapting.

3. More Paperwork & AuthorizationsCustomers may need to sign a POA if they are listed as the importer of record, giving carriers legal authority to clear shipments on their behalf.

4. Shift in Buying HabitsSome consumers may consolidate purchases, switch to domestic retailers, or prefer those offering duty-paid pricing.

Impact on Logistics Providers

1. Surge in Customs Processing Volume

• Millions of small parcels that previously bypassed customs processing will now require formal entry.

• This will strain carrier and broker systems.

2. Increased Customer Interaction

• Providers will need to obtain POAs from many first-time importers (including consumers), requiring new digital workflows.

• More customer education will be needed to explain costs and requirements.

3. Potential for New Service Models

• Carriers may offer all-inclusive duty-paid delivery to simplify the process for retailers and consumers.

• Expect higher service charges to offset increased administrative work.

Preparing for the Change

To stay competitive and avoid disruption, B2C retailers selling into the U.S. should act now:

1. Review Product Classifications

   Ensure all SKUs have accurate HS/HTS codes and correct country-of-origin markings.

   
   

2. Decide on a Duty Strategy

   Will you ship Delivered Duty Paid (DDP) or Delivered At Place (DAP)?

   DDP offers more customer certainty, but at a higher operational cost.

   
   

3. Update Customer-Facing Information

   Be transparent about possible duties and delivery timelines post-August 29.

   
   

4. Coordinate with Logistics Partners

   Make sure your shipping partners are ready for the spike in customs processing and POA requests.

In Conclusion

The removal of the U.S. duty-free threshold is not just a policy tweak — it’s a fundamental shift in cross-border retail dynamics. For B2C retailers, the winners will be those who plan ahead, adapt quickly, and communicate clearly.

For customers, it means higher costs and more friction at the border. For logistics providers, it’s an operational challenge — and an opportunity to add value with streamlined, duty-inclusive solutions.

From August 29, 2025, the era of “duty-free small packages” to the U.S. will be over. The question is: will your business be ready?

Contact us today to learn how our US Duty reclamation & Importer of record service can ensure your business is one of the winners in this new business environment.