De Minimis & Section 321 for China Imports: What Changed in 2025

For years, the US de minimis exemption under Section 321 of the Tariff Act let any parcel valued at $800 or less enter the United States duty-free, tax-free, and with minimal customs paperwork. It was the engine of cross-border dropshipping — Shein, Temu, AliExpress sellers, and countless smaller operators built businesses around it.

That changed in 2025. The exemption now excludes Chinese-origin goods in most cases. If you’ve been importing from China direct-to-consumer or running a US-based dropship operation that ships fulfilled-by-China, the math has shifted significantly.

Here’s what’s still allowed, what’s not, and three realistic restructures.

What Section 321 is (was)

Section 321 of the Tariff Act of 1930 set a threshold below which imported goods bypass formal customs entry. Congress raised it to $800 per person per day in 2016, the highest de minimis threshold in the world.

Under the old rules, a parcel valued at $800 or less entered the US:

Duty-free — no tariff, no Section 301
Tax-free — no merchandise processing fee
Paperwork-light — informal entry, no formal customs broker required
Fast — couriers like DHL, FedEx, USPS pushed packages through CBP in hours, not days

This was the legal mechanism that let Chinese sellers ship a $35 t-shirt direct to a US consumer with no duty markup, undercutting US-based retailers who paid full Section 301 tariffs on the same goods bought in bulk.

What changed in 2025

The Biden administration began the policy review in late 2024; the Trump administration accelerated it in early 2025. The current state (as of mid-2025, subject to further change):

De minimis is suspended for Chinese-origin goods. Parcels valued at $800 or less containing goods of Chinese origin no longer qualify for the duty-free, paperwork-free entry. They are now subject to full duty + Section 301 tariffs + the normal customs entry process.
The threshold for non-Chinese goods remains $800 in most categories.
Apparel, textiles, and Section 301-listed goods from China were the first targeted before the broader change.
CBP enforcement is real — packages flagged at facilities including JFK, LAX, ORD, and Memphis are now held for formal entry rather than waved through.

Note: this is a fast-moving area. Verify current status with CBP or your customs broker before making fulfillment decisions. The framework here describes the policy direction, not a guarantee of any specific day’s rules.

What this means in practice

Three buyer types are most affected.

1. China-fulfilled dropshippers

If your business model was: customer orders on your Shopify, you forward the order to a Chinese supplier or 3PL (CJ Dropshipping, Yun Express, etc.), they ship a parcel direct from China to the US consumer — your unit economics just changed.

A $35 sale that used to land duty-free now incurs:

Section 301 tariff (7.5% or 25% on most categories)
Merchandise processing fee (~$2 minimum per entry)
Customs broker fee (formerly unneeded, now ~$25-50 per shipment if formal entry)
Slower delivery (5-10 days added)

On a $35 t-shirt with a 25% Section 301: $8.75 in duty + $2 MPF + $30 broker (if applicable). The product margin disappears.

2. Sub-$800 sample buyers

Buying samples from Chinese suppliers under $800 used to be effectively free of customs hassle. Now expect formal entry on most samples, which adds time and possibly broker fees even at low value.

For a $200 sample, this can mean $50-80 of customs friction that didn’t previously exist.

3. Bulk importers — largely unaffected

If you’re importing 1,000+ unit orders by sea or air freight, you were already filing formal customs entries and paying full duty + Section 301. Nothing changes for you. The de minimis change actually levels the playing field — your competitors who were arbitraging dropship-from-China lose their cost advantage.

Three realistic restructures

Restructure 1: Bulk import + US 3PL

The “old school” model becomes the new default. Import your inventory by sea freight in bulk (FCL or LCL), clear customs once, store in a US 3PL warehouse, and ship D2C from there.

Pros: per-unit shipping cost drops dramatically (US ground vs. China-to-US air), faster delivery to customers, no per-order customs friction.

Cons: requires inventory capital. Slower iteration on new SKUs.

Math: at ~300 units/month per SKU, FCL + 3PL nearly always beats fulfilled-from-China even with the old de minimis exemption. With the new rules, the break-even is much lower (~50-80 units/month per SKU).

For shipping mechanics, see shipping from China to USA cost and LCL vs FCL sea freight.

Restructure 2: Mexico or Vietnam transshipment

Some operators are moving inventory to Mexico (USMCA territory) or Vietnam (lower Section 301 exposure) and fulfilling US orders from there.

Caution: this is not the same as “Made in Vietnam.” Goods of Chinese origin shipped through Mexico are still Chinese-origin for US customs purposes. Genuine substantial transformation in the transshipment country is required to change origin. Repackaging or re-labeling doesn’t count.

CBP has been increasing enforcement on transshipment fraud. Don’t try to relabel Chinese goods as Vietnamese without legitimate manufacturing transformation — penalties are severe.

Restructure 3: Hybrid — fast SKUs from US 3PL, long-tail from China

For sellers with hundreds of SKUs:

Top 80% of revenue → bulk import to US 3PL
Long-tail SKUs → continue fulfilling from China and pass the new duty cost to the customer (often via “international shipping fee” line at checkout)
Test new SKUs from China (slower, more expensive) before committing to bulk

What to do this quarter

If you’re affected:

Recalculate landed cost on your top 10 SKUs under formal entry rules. Identify which ones are still viable to ship from China and which need to move to bulk import.
Talk to a customs broker about formal entry options for repeat low-value shipments. Some brokers offer “consolidated entry” services that batch many small shipments into one filing, reducing per-shipment broker fees.
Get a sea freight LCL quote for the SKUs that should move to bulk. See LCL vs FCL sea freight from China for break-even math.
Check HS codes — some products fall outside the China Section 301 lists, which keeps the duty exposure low. See China HS code lookup guide.
Reprice or update your Shopify product page if you’re forced to pass the duty cost through to customers.

How to verify current rules

Policy in this area is genuinely volatile. Authoritative sources:

U.S. Customs and Border Protection — Section 321: https://www.cbp.gov/trade/basic-import-export/e-commerce
CSMS (Cargo Systems Messaging Service) alerts on de minimis from CBP
USTR Section 301 actions: https://ustr.gov/issue-areas/enforcement/section-301-investigations
A licensed customs broker in your country — for a specific shipment, this is the only authoritative answer

Don’t rely on this article (or any blog post) for current rules at the day of a specific shipment. Check CBP messaging or your broker before you book freight.

Bottom line for importers

The era of “free shipping from China to your US customer” is ending. Bulk import + US 3PL fulfillment is the durable answer for any seller with predictable volume. Direct-from-China fulfillment is increasingly a niche tool for testing or genuinely low-volume long-tail products.

If you’ve been winning on cross-border dropship economics, plan a 90-day migration to a real warehouse setup. The window for “wait and see” is closing.