Navigating 321 de minimis and tariff policy

The U.S. government is considering tightening or eliminating the Section 321 de minimis exemption, which currently allows shipments valued under $800 to enter duty-free. If this loophole closes, brands relying on low-value international shipments—especially direct-to-consumer (DTC) models—could face higher import costs and potential delays.

Brands using third-party fulfillment centers in Mexico, Canada, or China to leverage Section 321 may need to reassess their supply chain strategy. Higher tariffs and customs duties on low-value shipments could lead to increased pricing, operational costs, and longer shipping times.

No, the impact will vary. Brands heavily reliant on offshore production and international fulfillment centers (especially in China) will likely see higher costs. However, companies with domestic fulfillment operations or a regionalized supply chain may be less affected.

Brands should consider:

• Exploring alternative fulfillment strategies, such as U.S.-based warehousing.
• Reevaluating product pricing to absorb potential tariff increases.
• Negotiating new supplier agreements to optimize landed costs.
• Monitoring regulatory updates to stay ahead of compliance changes.