Since the 1930s, de minimis rules have enabled low-cost imports to bypass duties at customs. But in 2025, these rules are under heavy scrutiny — and for good reason. Chinese fast-fashion giants like Shein and Temu have exploited the de minimis threshold to dominate global markets, leaving many retailers asking: Should de minimis exemptions be reformed or abolished?
What Are De Minimis Rules?
De minimis rules set a monetary threshold under which imported goods can enter a country duty-free. These thresholds vary by country:
Originally designed to simplify the return of personal goods from travel, the rise of cross-border e-commerce has transformed how these rules are used — and abused.
E-commerce shifted global logistics from bulk shipping to direct-to-consumer parcels. While this improved convenience for consumers and customs, it also opened loopholes for unethical practices.
Platforms like Shein and Temu ship individual orders directly from China, allowing nearly every shipment to fall under the de minimis threshold. This means no duties, even on massive volumes of orders.
Cheap Chinese e-commerce companies have been successful for many reasons, from trends on social media to inflation bringing buying power down. However, companies like Shein would have never achieved their current level of success without the de minimus tax exemption.
Unlike most other large brands, Shein and Temu do not bulk ship products to a local warehouse for individual order fulfillment. Instead, each order is shipped directly from the Chinese warehouse to the end user, wherever that end user is.
While plenty of e-commerce brands ship individual parcels to international customers, this is typically only done on a small scale. Shipping individual parcels from country to country is very expensive, so most brands only do it when fulfilling to a small number of buyers abroad.
Shein’s largest market by revenue is the United States. Yet, instead of fulfilling from a local US warehouse, the company routinely ships orders from their warehouse in Guangdong, China.
Plus, Temu and Shein have to ship many parcels in planes to get them to customers on time, and the companies foot the bill for this high-cost method of shipping.
To rectify the unfair advantage over local sellers, many countries have already done something about it. Nations like South Africa have effectively done away with De minimus, and a few member states in the EU would follow suit by doing away with the exemption entirely.
However, these reactions are sure to have negative effects on international trade. Sure, de minimus creates an unfair advantage for Chinese fast fashion brands to undercut local ones, but there’s an important argument to be made for it.
The issue is that de minimus benefits us all, and it has for some time.
So if we can’t get rid of the exemption, how can we help create a more competitive environment for e-commerce brands?
Side effects of minimizing de minimus
Markets are vulnerable right now, so policymakers need to be careful about degrading de minimus. There may be unintended negative effects for smaller businesses and consumers, even if the policies are being implemented to promote fair competition among retailers.
If de minimus is degraded, unintended consequences would likely include slower supply chains and socioeconomic repercussions for shoppers— especially in the lower income brackets.
Socioeconomic hits to consumers…particularly lower-income
In the USA, a recent Yale and UCLA study showed that degrading de minimus would result in 14 billion in economic losses for Americans. The study also shows that changes to the tax exemption law will disproportionately harm low-income and minority consumers.
Shoppers from a wide range of tax brackets shop at Chinese fast fashion companies, but a far higher percentage of low-income shoppers are shopping at three main platforms: Aliexpress, Shein, and Temu.
Customs slowdowns
Without de minimus, the flow of goods will slow down.
Imagine how many more customs calcultations they will need to perform if de minimus exemptions are lifted, or otherwise degraded.
The process of calculating duties on each item is cumbersome and time-consuming for customs officers. Having to do that more slows down customs and slows shipping.
International trade degradation
If one nation degrades de minimus, trading with that nation becomes more expensive. It becomes more difficult and less favorable to trade between nations, slowing down international trade.
Many e-commerce brands have come to rely heavily on international trade. Particularly when their home market is saturated, selling to other countries provides a sustainable way to grow and expand.
A way forward: How to fix the problem without causing new ones
Creating a fair playing field for all retailers is a complicated idea on a global scale. Different countries have different laws and ways of regulating labor and commerce, making it difficult to put all brands on an equal footing in the global market.
However, many nations are trying to write up laws that specifically bar brands from “non-market economies” from using the de minimus exemption. This method would be an ideal way to stop companies like Shein and Temu from dominating various markets and crowding out local competitors.
Confused about new duty rules? Work with a 4PL that can guide you through it
Even for midsized, growing e-commerce brands, competing against giants like Amazon and Temu can seem like a Herculean task. Luckily, you don’t need to be Jeff Bezos to run an efficient, agile logistics operation globally. That’s what we at Wayfindr (formerly CBIP Logistics) are there for.
Navigating international customs compliance, de minimis thresholds, and supply chain regulations isn’t easy — especially in a post-pandemic, protectionist world.
At Wayfindr, we help brands scale globally by managing complex logistics across borders. As a 4PL logistics provider, we:
Connect with vetted customs brokers
Stay up to date on de minimis rule changes worldwide
Offer real-time visibility through our tech platform
As Wayfindr's Director, he draws on 10+ years of experience in corporate finance and cross-border operations across the Asia Pacific region—helping build the systems behind Wayfindr’s global, carbon-neutral 4PL model.
We’re here to make things simpler for you – we won’t spam your inbox or blow up your phone. When you enter your information:
(Within 24 hours) A member of the Wayfindr team will read your request and schedule a meeting by email. A more in-depth form will be attached to the email.
We will ask you about your needs and specific logistics requirements.
We will take your information and put together a plan designed for your business.
