Section 321 is the part of US customs law that allowed low-value shipments, valued at 800 dollars or less for one person on one day, to enter the United States free of duties and most fees. At the time of writing, that duty-free treatment ended for goods from China and Hong Kong in May 2025 and was suspended for every country effective August 29, 2025. Parcels shipped direct to US consumers from abroad now owe duties and go through an entry, so the old cross-border model no longer works as it did.
This piece explains what Section 321 was and how brands used it, what changed in 2025, what it means for foreign direct-to-consumer brands, and the three models that replace it: bulk import into a US 3PL, delivered duty paid checkout, and marketplace fulfillment. We also cover how to rework unit economics and duty messaging. These rules have moved several times and may move again, so confirm current CBP guidance with a licensed customs broker before you change anything.
What Section 321 de minimis was.
De minimis means a value below which a country does not bother collecting duty. In the US it came from Section 321 of the Tariff Act of 1930, and the threshold was raised to 800 dollars in 2016, among the highest in the world. A shipment under the threshold, imported by one person on one day, could clear with minimal data and no duty.
Brands used it in three ways. A foreign store shipped each order as a single parcel from its home warehouse. Cross-border logistics companies consolidated many orders on one flight and cleared each parcel under de minimis. And some sellers held stock in Canada or Mexico, then shipped individual orders into the US, including into Amazon fulfillment programs built around Section 321. All three depended on the parcel entering duty free.
What changed in 2025.
The changes came through executive action in 2025, in stages, and were tied to the wider tariff changes of that year and the next.
- May 2025: duty-free de minimis ended for goods from China and Hong Kong.
- August 29, 2025: de minimis treatment was suspended for commercial shipments from all countries, regardless of value or how they ship.
- Postal shipments were given their own duty collection methods, and several national postal services paused some US-bound services while they adjusted.
- Carriers began filing entries and collecting duties and brokerage fees on parcels that previously cleared with no charge.
The legal basis and timelines have been the subject of executive orders, legislation and litigation, and they may change again. We deliberately do not state tariff rates here. The duty on a parcel depends on its HTS classification, its country of origin and whatever additional tariffs are in force on the day it enters. Check CBP's current guidance and have a licensed customs broker confirm your specific products.
What it means for cross-border DTC brands.
For a foreign brand shipping single parcels to US buyers, three things change at once. Every parcel now carries duty. Every parcel needs an entry, informal below 2,500 dollars in most cases and formal above, which means a data filing, an importer and a fee from whoever files it. And someone has to pay all of it, either the brand at checkout or the customer at the door.
The last point is where most of the damage shows up. When the carrier asks the customer for duties and a brokerage fee before delivery, a share of customers refuse the parcel. The brand pays for the return, loses the sale and often gets a bad review. Canadian brands feel this sharply because the US was their natural first market by parcel. Goods that qualify under the USMCA trade agreement may still enter free of some duties, but that requires a correct origin claim and still requires an entry, so confirm with your broker how it applies to each product.
“The duty was never the only cost. The real damage is the surprise charge at the door, because a refused parcel costs the sale, the return freight and the customer.”
The three models that replace direct parcels.
| Model | How it works | Who it suits | Main tradeoff |
|---|---|---|---|
| Bulk import to a US 3PL | Ship pallets or containers, clear one entry, store in a US warehouse, ship orders domestically | Brands with steady US demand and products that store well | Duty is paid on import value, not retail, and delivery is fast, but you carry US inventory and a 3PL contract |
| Delivered duty paid checkout | Keep shipping from home, calculate duties at checkout and collect them, then the carrier or a partner clears the parcel | Brands testing the US, with high value per order or wide ranges that are hard to stock | No US inventory, but slower delivery and per-parcel entry and service fees |
| Marketplace fulfillment | Bulk import, then send stock to FBA or another marketplace program that ships the orders | Brands whose buyers already search for the category on Amazon | Access to existing demand and fast shipping, but marketplace fees and less customer data |
| Delivered duty unpaid (status quo) | Keep shipping as before and let the customer pay duty and fees on delivery | Very few brands, mainly low-volume and high-loyalty | No setup, but refused parcels and poor reviews |
Bulk import into a US 3PL is where most brands with real US demand end up. You need an importer of record, a broker and a bond, but you make one entry per shipment instead of one per parcel, and duty is based on the value you paid for the goods rather than the retail price. A foreign brand can hold the importer role itself as a non-resident importer, through a US entity, or through an IOR service provider.
Delivered duty paid (DDP) checkout keeps the home warehouse. Cross-border checkout and duty calculation tools estimate duty and taxes from the product's classification and origin, show a landed price to the buyer, and pass the data to the carrier or clearance partner. Shopify and several cross-border providers support versions of this, and the accuracy depends entirely on the classification data you give them.
Marketplace fulfillment combines bulk import with Amazon FBA, Walmart Fulfillment Services or similar. At the time of writing, Amazon does not act as importer for FBA inventory, so the IOR setup is the same as for a 3PL. Our comparison of Shopify vs Amazon covers how to weigh your own store against the marketplace.
Reworking unit economics, step by step.
Duty messaging that keeps US buyers from bouncing.
American shoppers expect the price they see to be the price they pay, plus sales tax. If you collect duty at checkout or fold it into the price, say so clearly on the product page, in the cart and in shipping information: duties included, no charges on delivery. If a delay or a duty is possible, say that too, before purchase. Update order confirmation and shipping emails to match, and brief customer service with plain answers. Paid media landing pages and ads should not promise fast delivery that a cross-border parcel cannot meet.
What usually goes wrong.
- The store keeps shipping duty unpaid and discovers the problem through refused parcels and chargebacks weeks later.
- A checkout duty tool is switched on with missing or guessed HTS codes, so the duty collected does not match the duty billed.
- Parcels are undervalued or described vaguely to reduce duty. That is the importer's liability and can lead to penalties and held shipments.
- The brand moves to a US 3PL without an importer of record, bond or broker ready, and the first container sits at the port.
- Prices are converted from the home market instead of rebuilt from landed cost, so margins disappear on the products that sell most.
- Site copy, ads and shipping emails still promise free, duty-free or fast delivery that is no longer true.
Where the customs answer stops and the commercial work begins.
Your customs broker can tell you what duty applies and how to enter the goods. The rest is commercial work: choosing which SKUs to stock in the US, rebuilding prices and shipping thresholds, reconfiguring checkout and the storefront, rewriting duty and delivery messaging, setting up a 3PL or marketplace fulfillment, and wiring tracking so you can see what the new model does to conversion and margin. We run that side and coordinate with the broker, accountant and logistics providers, which is how we approach a US e-commerce launch for foreign brands.
What is Section 321?
Section 321 of the Tariff Act of 1930 set the US de minimis rule, which let shipments valued at 800 dollars or less, imported by one person on one day, enter free of duties and most fees. Cross-border online stores relied on it to ship individual parcels to US buyers. At the time of writing, that duty-free treatment is suspended.
Is de minimis still allowed in the US?
At the time of writing, no for commercial shipments. Duty-free de minimis ended for goods from China and Hong Kong in May 2025 and was suspended for all countries effective August 29, 2025. The rules have changed several times, so check current CBP guidance and confirm with a licensed customs broker before relying on any low-value exemption.
Do Canadian brands still pay duties shipping to US customers?
Parcels from Canada no longer qualify for duty-free de minimis, so each needs an entry and may owe duty. Goods that qualify under the USMCA agreement may enter free of some duties with a correct origin claim, but entry and fees still apply. A customs broker should confirm how this works for each product.
What is the best alternative to Section 321 shipping?
For brands with steady US demand, bulk importing into a US 3PL is usually the most economical, because duty is paid on import value and orders ship domestically. Brands testing the market often use a delivered duty paid checkout instead. Many run a split model, stocking fast sellers in the US and shipping the rest from home.
Should I show US customers duties at checkout or include them in the price?
Either works if the buyer sees the full cost before paying and nothing is collected at the door. Including duty in the price feels most familiar to American shoppers. Showing it at checkout keeps prices lower on the product page. Test both, and make the message consistent across ads, product pages, cart and shipping emails.