The world of ecommerce is shifting – again.
For years, the de minimis exemption has allowed low-cost imports to enter the U.S. duty-free. Under this rule, shipments valued at under $800 or less could bypass traditional customs duties, giving international sellers a significant price advantage over us U.S.-based brands.
The de minimis rule, in its current form, was established in 2016. While originally intended to simplify customs processing for travelers and small shipments, the rule has been widely leveraged by overseas ecommerce platforms to ship billions of dollars in goods directly to U.S consumers while avoiding import tariffs. However, this is changing right now.
As part of a series of new trade policies, President Trump recently signed executive orders that impose a 10% tariff on Chinese imports and suspend the de minimis exemption for shipments originating from China. This move is expected to have wide-reaching consequences for brands, retailers, and logistics providers across the industry.
For U.S.-based brands that rely on overseas manufacturing, particularly in China, these changes will result in higher shipping costs. While the removal of the de minimis exemption primarily affects companies using direct-to-consumer (DTC) shipping from overseas, many brands that import goods in bulk will also face increased tariffs.
Companies like Shein and Temu, which depend on the de minimis exemption to sell ultra-low-cost products, may need to raise prices or alter the logistics strategies. Some may shift to more U.S.-based warehousing and fulfillment to avoid the direct import restrictions, potentially leveling the playing field for domestic brands.
While these policy changes pose challenges, they also create opportunities for U.S.-based brands and retailers that have long struggled to compete with Chinese ecommerce platforms. With fewer low-cost imports undercutting domestic prices, U.S. sellers may see improved margins and a more competitive marketplace.
Brands that currently manufacture in China may want to explore alternative sourcing options, including bringing more manufacturing processes stateside or manufacturing in other low-tariff regions to reduce their exposure to tariffs.
Some 3PLs offer light manufacturing or assembly services within this U.S. This strategy allows brands to import products in an unfinished state, potentially classifying them in a lower tariff category, and then complete the final assembly, packaging, or customization domestically.
Instead of relying solely on marketplaces like Amazon or direct-to-consumer models, brands may benefit from expanding into wholesale, retail partnerships, or subscription models to mitigate the impact of rising costs.
If brands need to adjust pricing due to increased costs, they should ensure they are offering a strong brand experience, high quality products & packaging, and excellent customer service to retain loyal customers. Consumers are likely to pay a premium for trusted brands with a reliable reputation and that continue to delight.
In this shifting trade landscape, choosing the right 3PL is more important than ever. Settling for providers who simply ship and store products with mediocre customer service is the best way to fall behind. Brands should seek out a true partner – one that provides value-added services, strategic guidance, and expertise in navigating trade regulations.
A quality 3PL can help brands uncover savings opportunities, enhance their brand image, and optimize their logistics processes. The best 3PLs take a proactive approach to continuous improvement, always looking for ways to help their customers stay ahead of regulatory changes and market shifts.
The reality is that these policy changes aren’t just a one-time disruption – they're part of an ongoing evolution in global trade that brands must be prepared to navigate. At Motivational, we help brands adapt to shifting regulations, optimize supply chains, and find cost-effective fulfillment solutions. With more changes sure to come, having a flexible and proactive logistics partner has never been more critical.
Whether you need flexible warehousing, value-added services like light manufacturing or assembly, or help fulfilling additional sales channels, we’re here for you. Let’s talk.