End Of $800 Duty-Free Rule Sends Shockwaves Through US Small Businesses

Int'l Business Times

5 days ago

President Donald Trump on Tuesday unleashed a new wave of tariffs targeting countries that have failed to finalize bilateral trade deals with the U.S., signaling a dramatic escalation of his second-term trade agenda. The White House announced a sweeping series of import duties, some taking effect as early as Aug. 1, that are expected to hit key sectors like manufacturing, electronics and retail.
Among the most consequential measures is the end of the de minimis exemption, a long-standing rule that allows goods valued under $800 to enter the US duty-free. According to Wired, the exemption will be fully revoked for all countries starting Aug. 29, dealing a blow to small businesses and e-commerce platforms that rely on low-cost international shipments.
"This is going to hit every small importer hard -- from Etsy resellers to small-scale manufacturers," said a compliance officer with a major logistics firm, as reported by Reuters. The move is widely expected to increase shipping costs, customs delays and administrative burdens for U.S. retailers and consumers alike.
In addition, the Trump administration announced new 50% tariffs on copper and copper alloy products, citing national security concerns under Section 232 of the Trade Expansion Act. The tariffs will apply to imports from major producers including China, Brazil and South Korea. These metals are crucial for U.S. construction, electrical systems, and green energy technologies.
According to AP News, more than a dozen countries -- including India, Turkey and Vietnam -- will now face tariffs between 25% and 30%, after failing to sign new bilateral trade agreements with the U.S. by the administration's Aug. 1 deadline.
Trump's trade team framed the actions as part of a broader campaign to reset the global trading system. In a press release, Treasury Secretary Jacob Bessent said the U.S. is "enforcing fair trade standards globally" and warned that "countries that want access to the U.S. market must play by our rules," as quoted by Barron's.
The crackdown is also targeting a practice known as transshipment, in which exporters route goods through third-party countries to disguise their true origin and evade tariffs. According to The Washington Post, the administration has announced new enforcement rules requiring enhanced origin verification for any product deemed at risk of transshipment abuse. Those rules go into effect in mid-August.
Trade experts warn that the cumulative effect of these new measures could be severe. According to the Tax Foundation, the total volume of U.S. tariffs under Trump's second term is now on track to exceed those imposed during the height of the 2018–2019 trade war. A Yale Budget Lab analysis released in mid-July described the current U.S. tariff regime as "the most economically consequential and legally aggressive" in decades.
Notably, a separate set of tariffs imposed earlier this year under the International Emergency Economic Powers Act (IEEPA) was recently struck down by a federal court, which ruled that the president had exceeded his authority. According to Wikipedia, oral arguments in the appeal of V.O.S. Selections v. United States were scheduled for July 31, with a final ruling expected later this summer. If upheld, the decision could sharply limit the administration's ability to unilaterally impose future duties.
Congress is also weighing its response. Lawmakers on both sides of the aisle are backing the Trade Review Act of 2025, which would require Congressional approval for any new tariff that remains in effect for more than 60 days. The bill has drawn support from small business groups, though the White House has threatened a veto. Details on the proposed law can be found on Wikipedia.
Some signs of diplomatic progress have emerged. As reported by Investor's Business Daily, the U.S. and China reached a limited trade truce in June that included Chinese commitments on rare earth exports and opioid enforcement. However, the agreement expires Aug. 12, and the next round of negotiations remains uncertain.
Back on Main Street, the latest moves have stoked anxiety among small business owners already struggling with inflation, supply chain instability, and rising borrowing costs. Industry groups have been quick to sound the alarm. The National Retail Federation warned that revoking the de minimis exemption will "punish U.S. consumers and small businesses," adding that the policy change amounts to a hidden tax on everyday goods, as reported by Reuters. Meanwhile, the U.S. Chamber of Commerce has urged the administration to "reconsider actions that risk destabilizing global supply chains."
Whether the strategy succeeds in bringing trade partners to the table—or plunges the country into another prolonged trade war—will likely depend on what happens in the next few weeks.