Senate Moves to End De Minimis: What Retailers Need to Know

By [ Blake Harden ]
07/02/2025

In a major development for U.S. trade policy, the Senate has passed a sweeping budget reconciliation bill that includes a provision to permanently end the de minimis exemption for commercial shipments from all countries by July 2027. This marks a significant shift in how low-value imports—those valued at $800 or less—will be treated under U.S. customs law, and it has wide-ranging implications for the retail industry.

What Is De Minimis?

The de minimis rule allows goods valued up to $800 to enter the United States duty-free and with minimal customs oversight. Originally intended to streamline low-risk imports, the rule has become a flashpoint in trade debates as e-commerce has exploded. Prior to recent changes regarding shipments from China, more than four million packages entered the U.S. each day under this exemption (1.36 billion a year), many from overseas sellers who bypass traditional retail channels and regulatory scrutiny.

What the Senate Just Passed

The Senate’s provision, which mirrors language passed by the House in May, would end de minimis treatment for all commercial shipments by July 1, 2027. The measure is part of the broader budget reconciliation bill that addresses expiring tax code provisions, spending and the debt limit. President Trump has said he wants it on his desk before the July 4 holiday.

Senators Lindsey Graham (R-SC) and Sheldon Whitehouse (D-RI) led the bipartisan push, citing the need to close a loophole that has harmed American manufacturers, endangered consumers, and undermined fair competition.

Why This Matters to Retailers

Retailers have long expressed concern about the de minimis provision, because it creates an uneven playing field. De minimis gives a competitive advantage to low-value imports by providing foreign sellers the ability to ship directly to U.S. consumers without paying duties and with minimal scrutiny by CBP for compliance with product safety, labor, or environmental standards that U.S. retailers must follow. In addition, retailers are concerned about reports that foreign businesses are manipulating the current de minimis rules to bulk ship products to distribution centers in Canada and Mexico for further distribution to the United States. This new law will ensure that foreign businesses cannot exploit the de minimis privilege, protecting American consumers and disadvantaged American companies.

As RILA noted in a recent policy statement, “Retailers welcome the administration’s actions to address the de minimis loophole, which has allowed unvetted goods—including those made with forced labor or containing unsafe materials—to flood the U.S. market.” The Senate’s action builds on these efforts by codifying a permanent end to the exemption.

What Comes Next

The bill now heads to the House for final approval. If passed, it will be signed into law and set in motion a two-year phase-out of de minimis treatment for all commercial shipments. The Trump administration has already taken executive action to restrict de minimis access for Chinese goods, which account for roughly two-thirds of all such shipments. The legislative provision would expand that restriction globally.