The ripple effect of new tariff rules faced by small businesses: the abolition of de minimis

The de minimis rule that exempted customs duties on international parcels under $800 has been abolished. At first glance, this policy change appears to be a measure to curb large Chinese companies like Shein and Temu, but the most severely impacted will be small and medium-sized businesses in the United States. With President Trump’s executive order taking effect today, the environment faced by small business owners will change dramatically.

The Reality Brought by the Abolition of the De Minimis Rule

The initial goal of abolishing the de minimis rule was to regulate small packages of low-cost goods sent directly to U.S. consumers by major companies like Shein and Temu. However, the actual burden is now concentrated on different groups.

For small businesses sourcing products directly from overseas suppliers, the situation has changed overnight. Consumers have large platforms like Amazon and alternative options, but small business owners relying on international procurement have limited choices. Marketplaces used by millions of small businesses, such as Etsy, eBay, Poshmark, and Faire, are expected to be immediately affected.

Signs of this are already appearing in the stock market, with Etsy’s stock price dropping about 20% since mid-August and eBay falling approximately 10%.

Risks of Doubling Costs

Jacob Bennett, CEO and co-founder of the banking platform CruxAnalytics for small businesses, described the situation as “companies having to become trade policy experts overnight.” Low-cost sourcing that was previously duty-free will now face new tariffs.

Many small businesses operate with very narrow profit margins, so cost pressures are especially severe for those focusing on orders under $800. In some cases, there are realistic concerns about doubling procurement costs.

Growing Anxiety Among Business Owners

According to Bennett, recent surveys reveal that concern among U.S. small business owners is rapidly increasing. Indicators such as a surge in searches for emergency loans and advice on downsizing indicate the depth of their anxiety.

“Business owners are in an uncertain future, with no idea what will happen next,” Bennett said. The abolition of the de minimis rule is the latest in a series of policy changes following various tariff announcements made just weeks ago, and this “whiplash effect” is deepening the uncertainty in business management.

Expansion of De Minimis Usage by Scale

The background to this abolition includes a rapid increase in the number of international parcels. According to White House statistics, between 2015 and 2024, the number of de minimis shipments arriving in the U.S. increased approximately tenfold from 134 million to over 1.36 billion. U.S. Customs and Border Protection currently processes over 4 million such parcels daily.

Most of this increase was driven by the growth of U.S.-based small and medium-sized enterprises shipping low-cost goods directly to consumers.

Business Responses and New Tools

Platform companies are also responding quickly. Faire, as a B2B wholesale marketplace, added several new features this year to adapt to the tariff changes. A filter function was introduced to help customers quickly identify over 10 million duty-free items.

Etsy incorporated a compliance guide into its seller handbook and published a recommended carrier list that offers duty-paid shipping options. Additionally, they provide tools to support new cost calculations including tariffs, enabling sellers to reevaluate their pricing strategies.

The abolition of the de minimis rule is not just a regulatory change but a turning point that forces U.S. small businesses to fundamentally rethink their business models.