Looming de minimis restrictions put importers at a crossroads

Without de minimis treatment for imports from key U.S. trading partners, companies are now figuring out the best path forward for their supply chains.

During a webinar last week, cross-border logistics experts said there are several paths businesses can take depending on their particular needs. However, a deluge of trade policy changes and uncertainty about future regulations are making those decisions harder.

“It’s just fatigue around the conversation, because they just want to know what the rules are going to be,” Maggie Barnett, CEO of LVK Logistics, said.

The de minimis exemption is often leveraged by cross-border e-commerce shippers to ship sub-$800 products into the U.S. without having to pay additional duties, limiting shipping costs in the process.

The Trump administration plans to ax the exemption for products from China permanently once “adequate systems are in place” to quickly process and collect related tariff revenue. De minimis eligibility is also slated to be cut for goods from Canada and Mexico under executive orders slated to take effect next week.

Using a U.S.-based 3PL is a strong option at the current juncture, according to Barnett, since she expects the de minimis exemption will receive further scrutiny even when it no longer applies to shipments from China. If a company aggressively shifts their sourcing to Bangladesh, Vietnam or another country, that could just leave them vulnerable to future U.S. trade actions, Barnett said.

“Why would they just close this for China?” Barnett said, referring to de minimis treatment. “If the mandate is to reduce fentanyl, increase revenues into the U.S. and increase U.S. jobs, why just stop at China?”

Companies need to find a long-term fulfillment solution with less exposure to rapidly changing trade policies, as frequent supply chain shifts can be expensive for brands, Barnett added. Companies with 20,000 to 25,000 SKUs could incur expenses up to $100,000 just to move their inventory to a new 3PL, she said.

“That’s where the idea of co…