The de minimis customs threshold has long allowed low-value goods to cross borders without the burden of import duties or complex customs procedures. But across the US, UK, and EU, this rule is now under increasing scrutiny. As governments reconsider their trade, tax and economic policies in an age of ecommerce globalisation, the potential end – or major revision – of de minimis rules will reshape the retail and logistics landscape. 

The US President has confirmed in the Executive Action that he will lower or eliminate the $800 de minimis for all countries. The US has already moved to a new limited de minimis process for goods from China and Hong Kong with far higher rates.

The UK government is reassessing its current model and level. The EU announced in February 2025 that it would also review its threshold and require all sellers, regardless of value, to submit more detailed data for low-value imports under its new ICS2 system, hinting at a more comprehensive customs regime even for sub-€150 goods.

What is de minimis?

The de minimis is the minimum value below which goods can be imported into a country without incurring duties or taxes and without detailed customs procedures. It was designed to reduce bureaucratic strain and promote low-value trade.

• United States: Currently, the de minimis threshold is $800, one of the highest in the world. As an important distinction, the $800 attaches to the importer of the goods rather than the exporter.
• United Kingdom: This is currently set at £135, but UK VAT is still payable on top, and customs checks can apply depending on origin.
• European Union: The EU’s equivalent which is framed by its Import One Stop Shop (IOSS) rules threshold is  €150 plus EU Import VAT at the local country rate.

 Why is it under review?

1. Revenue loss and unfair competition

Governments have been lobbied by retailers who argue correctly that high de minimis thresholds and their equivalents allow foreign sellers – particularly from Asia – to avoid paying the same taxes and duties as domestic retailers, making their goods cheaper and putting local businesses and more expensive manufacturing bases at a disadvantage.

In all three markets, it is clear that the current system incentivises ecommerce giants and marketplaces to route goods through de minimis channels, often avoiding scrutiny and customs enforcement. Retailers are quick to point out that this fosters an uneven playing field: for example goods imported without duty and sales tax could be as much as 30% cheaper than goods imported into the US through traditional channels and sold by a US retailer.

Similarly, UK and EU authorities have voiced concerns about under-declaration, where sellers mislabel or undervalue goods to stay under de minimis limits, creating tax gaps and potentially harming domestic retailers.

2. Compliance and security

Customs authorities argue that the sheer volume of low-value packages entering countries under de minimis thresholds strains border controls and hampers the ability to enforce product safety, counterfeiting laws and environmental regulations.

Arguments for reform or elimination

• Boosting tax revenues: Removing de minimis could raise billions in lost duties
• Levelling the playing field: Domestic retailers would no longer be undercut by overseas sellers avoiding taxes and might consider stocking brands they would have rejected in the past as de minimis would have undermined their margin
• Improved enforcement: Customs could better regulate goods for safety, standards and counterfeiting.

Arguments against reform or elimination

• Higher costs for consumers: The most immediate impact could be on consumers, who may see price hikes, longer shipping times and added administrative burdens. It would also become more complex and expensive to send genuine presents to friends or family.
• Logistical overload: Processing millions of low-value parcels with full customs procedures could overwhelm systems and lead to delays. The US has specifically highlighted this as an issue and has delayed implementation until it has new systems in place.
• Small business disruption: Many small businesses and independent sellers rely on cross-border de minimis to reach global customers affordably. This is particularly true for smaller UK SMEs, many of which manufacture in the UK or EU and lost much or all of their EU business due to Brexit. As a result, they have been investing in B2C sales to the US under the de minimis threshold. De minimis has already changed in the US for Chinese goods but UK and EU brands are likely to be hit when the next round of changes are announced.

What’s next?

In the United States, the US President has announced that he will lower or eliminate the $800 de minimis. There is ongoing discussion about creating country-specific thresholds and China has already been excluded from de minimis eligibility altogether, albeit with the creation of a new China de minimis rule at a much higher tariff rate (but no sales tax requirement as yet).

The UK government has signalled interest in reassessing its current model. UKFT is in discussion with HMG on this.

In the EU, reforms are already underway. Starting July 2025, the EU will also require all sellers, regardless of value, to submit more detailed data for low-value imports under its new ICS2 system, hinting at a more comprehensive customs regime even for sub-€150 goods. The threshold value of IOSS transactions is also being debated. UKFT can provide members with further information on the new requirements.

A delicate balance

Ultimately, the debate over de minimis rules reflects a broader tension between trade facilitation and regulatory control. As governments attempt to close tax loopholes and protect domestic industries, they must also weigh the consequences for consumers, small businesses, and the free flow of goods.

Any changes to de minimis rules will likely require investments in digital customs processing, global coordination, and public communication to avoid unintended economic fallout.

At the same time, de minimis exemptions and their UK and EU equivalents are unfair. There are established ways of importing goods at the agreed tariff rate but de minimis simply provides a loophole to cheaper manufacturing countries to bombard the West with cheaper products, which are even cheaper if they do not have to pay duty, sales tax or meet the standards that protect consumers from dangerous or faulty products.

UKFT has predicted for many years that the US, UK and EU would look to review or end de minimis exemptions and that time has come. Companies using the exemptions will need to consider how they adapt.

UKFT can help members to evaluate the potential impact but some of the options will be:

• Consolidation of logistics arrangements to lower costs through a local 3PL arrangement or other international shipping options for more efficient logistics
• Considering setting up US and EU entities for UK companies to make for cheaper customs arrangements (and VAT refund and offset for the EU)
• Investment in new relationships with US retailers and agents who might reconsider stocking/representing brands they could not justify stocking before as their margins were undermined by DeMinimis
• Building export business in new markets on a B2C and B2B basis where there is the potential to make up for lost growth

UKFT will keep the situation under review and advise members as and when changes occur as soon as the full details are known. The same also applies to the broader US Additional Tariff situation when the US President’s 90 day pause comes to an end or is reviewed.

UKFT has written to the Secretary of State for Business and Trade with a list of requests and suggestions to ensure that the UK is ready for the challenges ahead.

UKFT recommends that UK companies using De Minimis for the US or IOSS for the EU, or those using the UK’s threshold to bring goods into the UK, should develop a plan to transition away from dependence on these schemes as they are bound to change beyond recognition. At the very least, the thresholds are likely to come down substantially, making them impractical for most fashion and textile goods.

The UKFT International Business team is happy to help member companies anticipate and prepare for upcoming changes, even before they are officially announced, as these changes, especially in the US, often take effect with very quickly.

Please contact info@ukft.org to start your discussions.

READ MORE: UKFT recommendations to HM Treasury and DBT on issues around US tariff changes (and de minimis)