De Minimis Ending: What You Need to Know About New Customs Processing
Starting August 29, 2025, every package under $800 requires full customs processing. Processing times increase from hours to days, and costs increase by $50-300+ per shipment.
The US ended the de minimis exemption. For China and Hong Kong, it already ended May 2nd. After August 29th, every international package faces duties, taxes, and customs paperwork. Shipping costs are increasing significantly, and delivery times are extending by 3-5 days.
The streamlined process that let millions of packages clear customs in hours is ending. Everything now goes through standard customs processing.
Looking for strategic business impact analysis? Read our complete guide to how de minimis ending affects different ecommerce business models.
What just changed
Before August 29:
Processing time: 2-6 hours
Paperwork: Almost none
Customs review: Automated scan
Extra costs: Zero
After August 29:
Processing time: 2-5 business days minimum
Paperwork: Full formal entry with detailed product codes
Customs review: 5-15% get pulled for physical inspection
Extra costs: $50-300+ per package
According to U.S. Customs and Border Protection, every business now needs proper HTS codes and duty calculations. The two biggest problems? Delays and money.
The money hit: real examples
$400 Electronics from China:
Before: $400 total
After: $606.67 total (52% more expensive)
New costs: $100 duty + $75 brokerage + $31.67 processing fee
$150 Clothes from Vietnam:
Before: $150 total
After: $254.17 total (69% more expensive)
New costs: $22.50 duty + $50 brokerage + $31.67 processing fee
FlavorCloud's analysis warns costs will keep rising as "brokers, compliance intermediaries, and platforms fill in the gaps."
What you need to do right now
Get your paperwork ready:
10-digit HTS codes: The generic 6-digit codes cause delays and extra fees
Detailed invoices: Vague product descriptions = customs holds
Customs broker: You can't handle this yourself - when customers change addresses or want different products, self-service editing prevents expensive documentation mistakes
Warn your customers:
Add 3-5 days to all shipping estimates in Shopify
Show the real costs upfront with shipping calculators
Update your policies - when customs adds days to everything, customers need to fix their own order problems
Shipping companies face challenges
According to National Customs Brokers & Forwarders Association members:
FedEx and UPS raised fees for China and Hong Kong packages. They're extending these changes globally after August 29th.
DHL temporarily suspended B2C services in April due to processing capacity constraints.
USPS experiences longer delays - customs brokers report 5-10 day processing delays through postal facilities due to limited infrastructure for formal entries.
How businesses are adapting
Moving inventory to US warehouses
Smart brands are moving products into US warehouses to avoid per-package duties. Instead of shipping direct from overseas, they're importing in bulk then shipping domestically.
Returns become much more expensive
Returns now require customs processing both ways.
Wrong size? Wrong address? Duties apply twice. A simple size exchange that was free before August 29th now includes:
Original shipment: $75+ brokerage fee
Return shipment: Another $75+ fee
Plus duties on both directions
Returns can eliminate profit margins. With duties at 15-25% plus $50-300+ processing fees each way, international returns can turn profitable orders into losses.
Customs brokers report return costs averaging $150-400 per round trip. Return prevention becomes essential for profit protection.
Who eats the extra costs?
You have two choices: absorb the costs or pass them to customers.
This decision determines your competitive position and whether customers hate the surprise fees.
Option 1: You pay everything (DDP - Delivered Duty Paid) Customers see the final price at checkout. No surprises at delivery.
Best for: Premium brands, orders over $200, when customer experience matters more than lowest price
Risk: You absorb unexpected duty spikes and examination fees
Upside: Clean customer experience, no delivery delays from unpaid fees
Option 2: Customer pays at delivery (DDU - Delivered Duty Unpaid)
Lower advertised prices, but customers get hit with surprise charges when the package arrives.
Best for: Price-sensitive customers, high-duty products, competitive markets
Risk: Customers refuse packages, complain about surprise fees, delivery delays
Upside: Your advertised prices stay competitive
Most brands are mixing both approaches - absorbing costs on high-margin items, passing through on commoditized products. According to National Retail Federation analysis, 60% of retailers use different strategies by product category.
How Cleverific helps with customs processing changes
When order changes require customs re-filing, customer self-service prevents expensive errors.
Address corrections, size changes, and product modifications now require customs documentation updates. When staff handles these changes, processing delays and errors increase. Self-service prevents these issues:
Reduce $150-400 return costs: Customers correct sizing and address issues before shipping
Improve delivery success: Address corrections before customs processing prevent failed deliveries
Decrease support tickets by 90%: Customers manage their own changes during processing delays
Avoid re-filing fees: Self-service edits prevent costly customs documentation corrections
When customs processing adds 2-5 days to every international shipment, Cleverific's self-service order editing helps Shopify brands maintain operational efficiency.
FAQ
How long will customs processing take after August 29? 2-5 business days minimum for standard processing, 5-7 days if packages are selected for examination. Peak season adds 1-3 additional days.
What documents are required for packages under $800? Enhanced commercial invoices with detailed product descriptions, 10-digit HTS codes for every item, accurate country of origin, and complete buyer/seller information.
How much will new customs fees cost? Brokerage fees range from $50-150 per shipment for informal entries, plus government processing fees starting at $31.67, plus applicable duties based on product and country of origin.
How can you tell if brands are passing costs to customers vs. absorbing them? Based on recent industry analysis, brands are using mixed strategies. Luxury brands with less price elasticity tend to pass costs through fully, while price-sensitive categories like basic apparel are absorbing increases to maintain volume. Many brands choose a balanced approach, accepting margin hits on some items while raising prices moderately on others. Key indicators include: gradual vs. sudden price increases, transparent cost explanations to customers, and selective pricing by product category rather than across-the-board hikes.
Can businesses avoid these new requirements? No. All commercial shipments under $800 must go through full customs processing starting August 29, 2025. The only exemptions are personal travel items under $200 and gifts under $100.
What happens if customs documentation is incorrect? Delays of 5-14 days for corrections, plus amendment fees of $50-100. Accurate documentation is critical for avoiding costly delays.
The August 29 deadline is approaching faster than most businesses realize. The infrastructure for this new reality—customs brokers, enhanced documentation, revised customer communication—takes time to build and test. Start preparing now to avoid operational disruption and maintain customer satisfaction during this major transition.
