Quick Answer: De minimis is dead — every China package now faces 17.5-40% in stacked tariffs. Recalculate costs, audit your catalog, and get customs handled by your fulfillment partner.

The $800 de minimis exemption that let dropshippers ship from China duty-free is permanently gone. As of February 2026, every package entering the US requires full customs processing — HTS classification, duty payment, and documentation. Combined tariffs on Chinese goods now stack to 17.5-40% on top of product cost (10% Section 122 + 7.5-25% Section 301 + normal MFN duty). The administration announced a 15% Section 122 rate but never formalized it — the Federal Register and CBP confirm 10%. That $30 product that used to land for $34 shipped now costs $40-46 after duties. The EU follows on July 1 with a new EUR 3 per-item flat duty. Mexico already imposes 50% tariffs on 1,463 Chinese product categories. This isn't temporary — Congress has bipartisan support for killing de minimis permanently. The sellers who recalculate their costs this week, audit their catalogs, and get customs compliance handled will keep their margins. Everyone else will discover the problem through chargebacks and returns. This guide walks through exactly what to do, whether you're selling $1k/month or $100k/month.

---

What Happened (30-Second Version)

Before February 2026: If your package was worth under $800, it entered the US with zero duties, zero customs paperwork, and near-automatic processing. Most dropshipped products qualified. This is why AliExpress-to-customer shipping "just worked."

After February 2026: That $800 threshold is gone. Every single package — regardless of value — now requires:

• HTS classification (a 10-digit code that determines your duty rate)
• Country of origin declaration
• Accurate value declaration
• Payment of all applicable duties and taxes
• Importer of record information

For Chinese-sourced goods, three tariff layers now stack:

Combined: 22.5-40% on most dropshipped products (with ~5% MFN duty).

If you want the full legal and policy breakdown, see our US Tariff Reform guide. This article focuses on what to do about it.

---

Here's what different product price points look like now:

Combined tariff rates: List 4A = 22.5% (most apparel, home goods). List 3 = 40% (consumer electronics, lighting, textiles). Assumes ~5% MFN duty + 10% Section 122.

The impact by seller level:

If You're Doing Under $10k/month

You're hit hardest in percentage terms. Low-margin products under $20 may no longer be viable at current prices. A $15 product with $4 shipping and a 40% markup ($26.60 selling price) used to give you $7.60 profit. After 22.5% tariffs (List 4A), your product cost is $18.38 — profit drops to $4.22. After 40% tariffs (List 3), profit drops to $1.60.

Your priority: Immediately check which of your products still have acceptable margins. Some won't. Better to know now than to find out through refund requests.

If You're Doing $10k-50k/month

You have enough volume that the per-unit tariff impact compounds fast. At 500 orders/month with an average $6.75 tariff increase, that's $3,375/month in new costs you didn't have before. You need to either absorb it (margin compression), pass it through (price increases), or optimize (product mix changes).

Your priority: Run the full catalog audit (Step 2 below) and make repricing decisions within the next two weeks.

If You're Doing $50k+/month

The dollar impact is largest but you likely have the margin structure to absorb or pass through. Your bigger risk is the customs processing overhead — every package now needs documentation that you (or your fulfillment partner) must handle correctly. Misclassification penalties are real.

Your priority: Ensure your fulfillment partner handles customs declarations competently. If they don't, you need a new partner. See our fulfillment partner evaluation guide for what to look for.

---

Step 1: Know Your Real Landed Cost (This Week)

The formula changed. Your real landed cost per unit is now:

Product Cost + Shipping + MFN Duty + Section 301 + Section 122 = Landed Cost

For a typical $30 Chinese-sourced home goods product:

That's a 20% increase over the old $34.00 (product + shipping only).

For the detailed rate tables by product category and HTS classification, see the tariff reform guide worked examples.

Step 2: Audit Your Product Catalog (This Week)

Create a simple spreadsheet with three columns for every active product:

Illustrative examples. Your actual rates depend on HTS classification.

Decision framework:

• New margin above 25%? Keep the product. Adjust price if needed.
• New margin 15-25%? Evaluate. Can you raise the price without killing conversion?
• New margin under 15%? Consider dropping. Low margins + chargeback risk = trouble.
• New margin negative? Drop immediately. You're losing money on every sale.

Step 3: Reprice or Replace (Week 2)

If you need to raise prices:

• Raise gradually — 5% now, another 5% in two weeks. Sudden jumps hurt conversion more than gradual increases.
• Reframe value — Add a faster shipping tier, bundle complementary items, or improve product descriptions to justify the higher price.
• Watch competitors — If everyone is raising prices (they are), the market adjusts. Your conversion won't suffer as much as you fear.
• Consider higher-AOV products — A $50 product absorbs the tariff better than a $10 product in percentage terms. The tariff on a $50 item is $11.25 (22.5%). On a $10 item, it's $2.25 — the same percentage but harder to pass through on a low price point.

If you need to replace products:

• Non-China sourcing (Vietnam, India, Turkey) eliminates the 7.5-25% Section 301 layer but still faces 10% Section 122
• Higher-margin niches (custom/personalized products, premium categories) absorb tariffs more easily
• Digital products or services have zero tariff exposure

Step 4: Fix Your Customs Compliance (Week 2-3)

This is where most dropshippers get stuck. Every package now needs customs documentation that you probably never dealt with before.

What you need:

• Correct HTS codes for every product in your catalog
• Accurate value declarations on every shipment
• Country of origin documentation
• An importer of record for each destination country

Your options:

1. Handle it yourself — Research HTS codes at hts.usitc.gov, file documentation per shipment. Viable for under 20 SKUs. Time-consuming and error-prone above that.

2. Hire a customs broker — Separate service, separate cost, separate relationship to manage. Adds $3-15 per shipment depending on complexity.

3. Use a fulfillment partner that handles customs — Customs declarations included in the per-order fulfillment fee. Single relationship. The documentation happens automatically because your partner manages it as part of the shipping process.

Customs eating your time? Just DS handles customs declarations across 15+ countries — HTS classification, duty calculation, and compliance monitoring included. Zero MOQ, per-order pricing. Start a conversation on WhatsApp.

Step 5: Plan for July 24 and Beyond (Ongoing)

The 10% Section 122 surcharge expires on July 24 unless Congress extends it. But that doesn't mean your costs go down:

• Section 301 tariffs (7.5-25% on China) are permanent — They don't expire with Section 122
• New Section 301 investigations launched March 11 target China and 15 other countries — new tariffs could arrive by Q4 2026 with no rate ceiling
• De minimis is NOT coming back — Both parties support its elimination. The Axle of Dearborn lawsuit is proceeding but even if successful, Congress would likely legislate it away
• EU adds EUR 3 flat duty July 1 — Another cost layer for EU-bound shipments

For the latest policy updates, see our March 2026 Intelligence Report.

Set these calendar reminders:

• July 1: EU EUR 3 flat duty takes effect — adjust EU pricing
• July 10: Reassess strategy ahead of Section 122 expiry
• July 24: Section 122 either expires or gets extended — have contingency pricing ready for both scenarios

---

Here's the other side of the de minimis story: your competitors are panicking too. The sellers who adapt fastest capture market share while others scramble.

Three specific opportunities:

1. Duty-inclusive markets — Markets like Mexico (where we offer duty-inclusive shipping) and the EU eliminate customs surprise for customers. Pricing transparency improves conversion. While competitors struggle with customs complaints, you deliver a clean checkout experience.

2. Higher-AOV product shift — Everyone is being pushed toward higher-value products that absorb tariffs better. If you move first, you establish positions in categories before they get crowded.

3. Competitor attrition — Sellers who don't adapt will exit. Products with fewer competitors have better margins. The tariff pressure creates a natural filter that benefits prepared sellers.

Want duty-inclusive shipping to Mexico, EU, and 15+ other markets? We handle customs so your customers see one price — no surprises. Let's talk on WhatsApp.

---

Is de minimis coming back?

Almost certainly not. The suspension has been reaffirmed multiple times under different legal authorities. The Axle of Dearborn v. Department of Commerce lawsuit is proceeding, but even a successful challenge would likely prompt Congress to legislate de minimis elimination — both parties have signaled support. Plan as though de minimis is permanently dead.

Do I need a customs broker for dropshipping now?

You need customs handled somehow — either by yourself (viable for small catalogs), a separate customs broker ($3-15/shipment), or a fulfillment partner that includes customs in their service. The third option is usually most cost-effective because customs documentation happens as part of the fulfillment process rather than as a separate step.

How much more will my products cost?

For Chinese-sourced products, expect 22.5-40% in combined tariffs on top of product cost (with ~5% MFN duty). A $30 product now costs $37-42 after duties (depending on which Section 301 list it falls under). Products in List 4A (apparel, home goods) face 22.5%; List 3 (electronics, lighting, textiles) faces 40%. The Section 122 rate is 10%, not the 15% that was announced but never formalized. Check your specific HTS codes for exact rates.

What about EU and other markets?

The EU eliminates its EUR 150 customs exemption on July 1, 2026, adding a EUR 3 flat-rate duty per distinct tariff heading per parcel. Mexico already imposes 50% tariffs on 1,463 Chinese product categories. The UK charges VAT on all imports. Duty-free dropshipping to major markets is essentially over worldwide.

Can my fulfillment partner handle customs for me?

That depends on your partner. Most dropshipping apps (DSers, Oberlo replacements) don't handle customs at all — they automate ordering from AliExpress, not customs compliance. Platforms like CJDropshipping have partial customs capability but inconsistent execution. Full-service fulfillment partners that include customs declarations in their per-order fee are the most reliable option for sellers who don't want to manage customs themselves.

---

De minimis is dead. It's not coming back. Every package from China now faces 17.5-40% in tariffs, and every seller — from beginners to veterans — needs to deal with customs compliance that didn't exist six months ago.

The action plan is straightforward: calculate your real landed costs, audit your catalog, reprice what's viable, drop what isn't, and get customs handled properly. The sellers who do this in the next two weeks will maintain their margins. The sellers who wait will discover the problem through refund requests and margin compression.

The biggest mistake you can make right now is doing nothing and hoping it resolves itself. It won't. But the second-biggest mistake is panicking and making permanent decisions based on a landscape that's still evolving. The Section 122 surcharge expires in July. New Section 301 tariffs are under investigation. The EU duty takes effect in July. Build flexibility into your pricing and sourcing decisions — the specific numbers will change, but the direction (higher costs, more customs complexity) is permanent.

For the full tariff math and HTS classification guide, see our US Tariff Reform guide. For the latest policy developments, see our March 2026 Intelligence Report. And for what to look for in a fulfillment partner that handles this complexity, see our post-de-minimis partner checklist.

---

Last updated: March 23, 2026

Related Intelligence Reports

#tariffs#us-market#de-minimis

US Tariffs and Dropshipping: The Complete Hub (2026)

Mar 23, 2026•Read

#fulfillment-partner#evaluation#customs

5 Things to Look for in a Fulfillment Partner After De Minimis (2026 Buyer's Guide)

Mar 23, 2026•Read

#costs#pricing#tariffs

The Real Cost of Dropshipping in 2026: A Complete Breakdown

Mar 23, 2026•Read

#shopify#fulfillment#international

Shopify International Fulfillment After De Minimis: The 2026 Guide

Mar 23, 2026•Read