The End of Duty-Free Shopping: How New U.S. Import Rules Will Hit Your Closet — and Grandma’s Gifts

Attention, fashion lovers and holiday shoppers: As of August 29, 2025, the U.S. government is ending the de minimis exemption that let you import goods under $800 without paying duties. This change comes via a new Executive Order signed by President Trump — and it’s not just about shopping sprees. Even gifts from overseas, like Grandma’s hand-knit Christmas socks, could now face duties before they reach your doorstep — depending on their value and how they’re shipped.

What’s changing?

Until now, U.S. customers could receive international shipments valued under $800 without paying import duties or going through a full customs process. Starting August 29th, that’s gone. All imports (except a short-term carve-out for postal shipments) will be subject to duties, taxes, and customs entry requirements — no matter their value.

The $100 Gift Rule: One Small Lifeline

One important detail: The long-standing $100 bona fide gift exemption remains in place. If Grandma in Canada sends a hand-knit sweater worth $100 or less, and it meets CBP’s definition of a true gift (from one individual to another, unsolicited, and not a commercial sale), it can still enter duty-free. However:

• If the gift’s fair retail value is over $100, duties will apply.
• CBP may aggregate multiple gifts sent the same day to the same recipient to determine value.
• Certain items (alcohol, tobacco, perfume over specific limits) never qualify for the exemption.

Postal shipments: The “Grandma’s gift” problem

Section 3 of the Executive Order sets special duty rates for packages arriving through the international postal network (like Canada Post to USPS) for the first 6 months after the rule change:

1. Ad valorem rate — a percentage of the item’s value, based on the “effective IEEPA tariff rate” for its country of origin.
2. Specific duty per item — a flat dollar fee per package, based on the tariff rate category of the country of origin:
   • Tariff under 16% → $80 per package
   • Tariff 16%–25% → $160 per package
   • Tariff over 25% → $200 per package

Example: Grandma in Canada sends you a $40 pair of hand-knit wool socks (tariff rate 16%). If the carrier chooses the “specific duty” option, you could pay $160 in duties on a $40 gift — unless it qualifies for the $100 gift exemption. If it’s $150, the exemption doesn’t apply, and you’re paying duties either way. And yes, customs can hold onto your present until you pay.

After the 6-month period, postal shipments will be charged ad valorem duties only.

Private couriers (FedEx, UPS, DHL): No grace period

If your shipment comes by private courier instead of the postal network, there’s no flat-fee option and no temporary carve-out. Duties at the ad valorem rate apply immediately on August 29 — regardless of value (unless it’s a qualifying gift under $100).

Why this matters for fashion purchases

Clothing is particularly hard hit because U.S. apparel tariff rates often fall in the 15%–32% range. That means:

• A $120 cotton sweater (16% duty) could face either $19.20 under the ad valorem method, or $160 under the specific duty method if mailed through the postal system during the grace period.
• A $60 polyester dress (28% duty) could mean $16.80 ad valorem, or $200 specific duty.

For private couriers (FedEx, UPS, DHL), ad valorem rates apply from day one.

The new MID requirement: A hidden challenge

On top of duties, U.S. Customs now requires more detailed import declarations, including:

• Country of Origin — where the goods were actually manufactured.
• HTS Code — the Harmonized Tariff Schedule classification that determines the duty rate.
• MID (Manufacturer Identification Code) — identifying the specific factory where the goods were made.

For large manufacturers, this is standard paperwork. But for small businesses — especially local fashion boutiques who purchase in small batches from distributors or designers — getting the exact factory information can be difficult or impossible. These retailers don’t control production and often receive goods through multiple intermediaries, meaning they may have to delay shipments until the required MID data can be obtained. In many cases, this information could be impossible to get, as a distributor or designer might be reluctant to share their factory sources.

Why there’s no easy workaround for small businesses

Some big global retailers can ship from U.S. warehouses and avoid these duties and new paperwork headaches. But small businesses, independent designers, and boutique fashion shops often can’t. Without direct manufacturer relationships, they face:

• Difficulty sourcing the required factory/MID information.
• Higher costs from customs delays or compliance service fees.
• Lost sales when customers face unexpected duties and paperwork.

This means the impact of the Executive Order isn’t just on “international sellers” — it hits Main Street, too.

Holiday headaches ahead

This change hits right before the holiday season — meaning:

• Higher prices for imported fashion and gifts
• Surprise duties even on sentimental gifts
• Longer delivery times due to customs processing

That cozy winter coat, sparkly holiday dress, or Grandma’s Christmas sweater may now cost significantly more, and could be delayed until duties are paid.

What you can do

• Shop early — We’re shipping U.S. orders by August 25, 2025 to help you beat the change.
• Get your fall wardrobe now — Lock in prices before duties hit.
• Do your holiday shopping in advance — Avoid inflated costs and shipping delays.
• Ask about DDP shipping — If a retailer can prepay duties, it saves you from surprise bills.

The bottom line

Come August 29th, duty-free shopping from abroad ends for U.S. customers. Whether it’s your dream fall outfit or Grandma’s Christmas socks, expect to pay — and often more than you think. Beat the rush, beat the duties, and shop early.