Importers Should Review Compliance to Plan for Trump Tariffs

Two recent notices of proposed rulemaking to limit a tariff exemption on low-value shipments could increase costs for companies and consumers and saddle companies with heavier administrative burdens.

As the Trump administration indicates it will pursue aggressive tariff policies, the proposals by US Customs and Border Protection are another impetus for US importers to review their supply chains, evaluate compliance practices, and update protocols.

For nearly a century—since the Tariff Act of 1930—many companies have been able to avoid tariffs and filing customs entries by capitalizing on a de minimis exemption for relatively inexpensive shipments under Section 321(a)(2). As implemented, this program eliminates the standard import tariffs, as well as those imposed under Sections 201 and 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962.

The threshold currently sits at $800. With President Donald Trump’s tariffs looming—including a potential Feb. 1 announcement of new tariffs affecting Canada and Mexico—it’s worth noting the Biden administration proposed new limits to enhance compliance with trade policies, strengthen national security, and support domestic industries.

According to CBP, the number of shipments claiming this Section 321 exemption increased from 139 million in fiscal year 2015 to 1.36 billion in 2024, largely due to e-commerce. That has made it nearly impossible to effectively monitor and manage imports. And as it turns out, this exemption can serve as a loophole for unlawful and unsafe goods—such as fentanyl, counterfeit merchandise, and non-compliant products—to enter the US.

To reduce this risk, the first notice would eliminate this administrative exemption for merchandise subject to specified trade or national security actions. Companies would need to comply with an enhanced entry process and submit data to CBP about the contents, origin, and destination of shipments prior to arrival in the US, helping CBP to target high-risk shipments more effectively.

Besides those security issues, many e-commerce companies abuse this exemption by circumventing tariffs. Technically, use of this provision is allowed for shipments valued at $800 or less that are imported by one person in a single day.

But the high volume of shipments makes it nearly impossible for CBP to track its use. This undermines US trade policy and harms domestic industries, especially in the textile and apparel sectors, as those goods would otherwise be subject to tariffs.

The second notice would remove goods subject to Section 201, 301, and 232 tariffs from eligibility under the program. This should increase revenue received from tariffs and benefit domestic companies by making their prices more competitive. If both notices are finalized, they would likely take effect by the end of March.

Eliminating the de minimis exemption could disturb businesses, including direct-to-consumer companies, and consumers. It likely would lead to higher costs and increased administrative burdens. More goods would be subject to Section 201, 301, and 232 tariffs, increasing costs that businesses likely would pass onto their customers.

Alternatively, businesses may explore adjusting their supply chains to mitigate the impact of tariffs by sourcing goods from different countries. This may include working with suppliers to move production to factories in countries that are not subject to punitive tariffs, but the effort would take time.

Importers also would need to adhere to formal customs entry procedures. That means completing more comprehensive documentation, including the filing of formal customs entries, which may increase the time and effort required to receive shipments. This additional processing time for customs clearance may also lead to delivery delays.

Companies that import goods can understand how this affects them by analyzing the potential tariff expenses and how they relate to their pricing structure. They can adapt by reviewing their supply chain and exploring alternate suppliers located in countries with more favorable tariff treatment.

They can also evaluate their compliance practices to ensure they can handle increased scrutiny and reporting requirements and update protocols accordingly—all best practices in the intensifying tariff environment.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Jodi Ader is senior manager in RSM US’ trade and tariff advisory services practice.

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