To bring goods into the United States, retailers have traditionally arranged for shipping containers full of products to arrive from China at U.S. ports. Those goods would then be trucked to a company’s warehouses and retail stores before being sold to consumers.
But retailers have been increasingly bypassing that process by individually packaging and shipping items directly from China to consumers under the de minimis law. With that method, the shopper is the official importer, rather than the retailer or e-commerce platform, and the value of the shipments largely stays under an $800 threshold.
In addition to avoiding tariffs, sellers do not have to provide as much information to U.S. Customs and Border Protection as with larger shipments.
That model has taken off since the Trump administration in 2018 and 2019 imposed tariffs on many Chinese goods that retailers brought to the U.S. through traditional channels. The surge in online ordering during the pandemic also helped to popularize such shipments, which now make up roughly a fifth of e-commerce orders.
The number of packages entering the United States each year under the de minimis rule has ballooned to more than one billion in 2023, up from 140 million a decade ago. China is by far the biggest source for such packages, sending more than all other countries combined, according to the customs agency.