The United States will suspend its longstanding tariff exemption for low-value imports starting August 29, 2025, under a new executive order signed by President Donald Trump. The exemption, known as the “de minimis” rule, allowed packages valued at $800 or less to enter the country duty-free when shipped outside the international postal system.
The policy change, which builds on earlier restrictions placed on shipments from China, is set to reshape global e-commerce logistics and impact major freight carriers. The White House said the move is aimed at closing trade loopholes that have allowed the smuggling of synthetic opioids and unfair market practices involving underpriced goods. According to U.S. Customs and Border Protection, de minimis shipments surged from 134 million in 2015 to over 1.36 billion in 2024, driven by rising cross-border online retail activity.
The rapid increase raised concerns about lost tariff revenue and security gaps in customs enforcement. Following the announcement, shares of FedEx and UPS both saw significant market movement. FedEx stock closed up 3.2 percent on the day, while UPS rose 2.7 percent, as investors anticipated increased shipping volumes and greater demand for services that meet new regulatory requirements.
FedEx and UPS benefit from tightening U.S. tariff enforcement
Analysts said the end of the de minimis rule could shift more shipments into higher-margin, tariff-compliant logistics channels typically handled by private carriers, boosting revenue for firms that dominate that space. Packages sent through private services like FedEx and UPS will now be subject to full import duties based on country-specific rates.
Meanwhile, shipments through international postal systems will face flat-rate tariffs ranging from $80 to $200 per package during a six-month transition period. After that, those packages will also be taxed according to country-specific tariff schedules. The administration has argued that this phased approach will give businesses time to adjust while ensuring long-term enforcement.
The de minimis exemption had been central to the business model of many low-cost e-commerce exporters, particularly in Asia. Chinese platforms used it extensively to send goods directly to U.S. consumers without delays or customs fees. The exemption’s removal for China in May caused air cargo volume from the region to decline by over 10 percent, according to industry data.
Major platforms may see higher U.S. consumer prices
As the exemption ends globally, logistics providers expect similar declines from other countries and a redistribution of global shipping patterns. Trade officials said the order accelerates enforcement ahead of the July 2027 repeal mandated by a tax and spending bill passed earlier this year. Only a few countries, including Japan and the European Union, have secured updated trade agreements with the U.S. that may mitigate the full impact of the rule change.
Others remain fully exposed to the new tariffs unless negotiations advance in the coming weeks. The policy is expected to raise prices for U.S. consumers and create challenges for small importers. However, shipping firms stand to gain as regulatory complexity increases demand for established logistics networks. Investors appear to be betting on the ability of companies like FedEx and UPS to capitalize on the changing environment and capture a larger share of the e-commerce freight market. – By Content Syndication Services.