Overview

For years, Section 321 allowed for one shipment per person or business per day that was valued at or under $800.00 USD to be imported duty free or “sectioned.” However, this exemption has been deemed to be a “loophole” that will cease to exist on August 29^th, 2025, following an executive order (Executive Order 14324) that repealed the statutory basis that allowed for the exemption.

In short, this means that U.S. businesses that previously brought in small amounts of goods from any foreign country without paying duty will now see their costs increase.

To fully understand how these changes will impact you, we highly encourage you to reach out to a trade professional, such as Star USA, or a licensed Customs Broker. The import process can be tricky to navigate and requires the correct infrastructure to be set up, which can take time, so DO NOT WAIT. Delays in acting could result in your imports being held up.

Will This Change Impact Me?

IT MAY! If you rely on any low value shipments to quickly clear Customs without paying duty, you need to be prepared as soon as possible as this will no longer be an option after August 29^th, 2025.

How Will These Changes Impact Me?

If you previously utilized De Minimis, you can expect to see the following changes after August 29^th, 2025.

• Your import shipments will require an entry to be filed with U.S. Customs in the Automated Commercial Environment (ACE).
• You, as the importer, are responsible for the accuracy of all import information declared to Customs. This includes 10-digit HTSUS, value, etc.
• You must comply with all Customs documentation and recordkeeping requirements.
• Your previously duty-free goods will be subject to all applicable duties and fees.

What If I Don’t Utilize De Minimis?

If you are 100% confident, you do not utilize Section 321, then this change will most likely have little to no effect on you.

However, if you are unsure whether you utilize Section 321, you should inquire with your Customs Broker today.

If you don’t utilize a dedicated Customs Broker and import through a courier service, such as USPS, de minimis imports will still be subject to country-specific IEEPA rates. There is a temporary 6-month period where you have the option to apply set amounts of duty on each item based on country instead of value.

To fully understand how these changes will impact you, we highly encourage you to reach out to a trade professional, such as Star USA, or a licensed Customs Broker. The import process can be tricky to navigate and requires the correct infrastructure to be set up, which can take time, so DO NOT WAIT. Delays in acting could result in your imports being held up.

How Can I Mitigate the Impact?

MPF CONSOLIDATION

MPF consolidation means entries will be grouped together and will collectively be subject to one MPF fee. However, MPF has a maximum of $634.62. So instead of paying this fee on each entry, paying it at once could result in substantial savings. However, this option has downsides that must be considered before implementing.

FOREIGN TRADE ZONES & BONDED WAREHOUSES

Foreign Trade Zones (FTZs) allow you to store your goods and make entry at a later date, giving you control over when duty and fees will be paid & allow for tariff or country of origin shifts that would assist in lowering the bill from CBP. However, there is a process and ongoing commitment to an FTZ that must be contemplated.

Like FTZs, bonded warehouses are another option to help control when goods make entry vs. when they physically arrive. However, their primary function is storage as opposed to FTZs.

DRAWBACK

If the imported goods are to be subsequently exported or destroyed, Drawback can be utilized to recoup a portion of duties. While Drawback is not available to mitigate all duties, you may want to look into the program.

FREE TRADE AGREEMENTS

Free Trade Agreements, or FTAs, can help lessen duty as they will still be effective on general rates of duty. However, review of the goods in question, certificate of origin, and oversight are important to ensure compliance is maintained.

KNOWING YOUR COMMODITY

Knowing your commodity is a simple, yet reliable way to help mitigate duties. For example, the reciprocal tariffs include an exclusion that exempts the U.S. content of goods containing over 20% U.S. content from additional tariffs. Additionally, some Chapter 98 HTS allow for the removal of additional duties if the goods are for the disabled or agricultural purposes.

Understanding what you are importing will prepare you to leverage any exclusions and exemptions, ensure correct classifications are being utilized, and allow you to navigate questions during the import process that may otherwise keep a shipment on hold.

Review the FAQs on the U.S. Customs and Border Protection website for more information.

For further information on the above or any other trade compliance concerns, contact Star USA at 844-804-0060.