US Tariffs and De Minimis Rule Changes Spark Economic Concerns, Increase Business Burden

Washington D.C. – New tariffs and the suspension of the long-standing "de minimis" rule for low-value imports are significantly increasing costs and administrative burdens for American businesses and consumers, prompting widespread economic concern. The changes, championed by the current administration, aim to reshape global trade dynamics but are met with skepticism from trade experts like Scott Lincicome, Vice President for Economics and Trade at the Cato Institute.

The recent tariff regime has seen the implementation of International Emergency Economic Powers Act (IEEPA) tariffs, reciprocal tariffs, and product-specific levies, affecting imports from numerous countries including China, Canada, Mexico, and India. These measures have pushed the average effective tariff rate to its highest level since 1941, with estimates suggesting an average tax increase of nearly $1,300 per U.S. household in 2025. The Tax Foundation projects a potential 0.8% reduction in U.S. GDP before accounting for foreign retaliation.

A significant shift impacting businesses and consumers is the suspension of the "de minimis" rule, effective August 29, 2025. This rule previously allowed duty-free entry for shipments valued at $800 or less. Now, all such imports are subject to applicable duties and require formal customs processing, introducing what Lincicome described as "new paperwork fees." This change, implemented via Executive Order on July 30, 2025, eliminates a pathway that facilitated billions of low-value shipments annually, widely used by e-commerce giants and small businesses alike.

"Tariffs + new paperwork fees. So, it's extra special tariffs, all paid by you. Feel the Golden Age!" Scott Lincicome stated in a recent social media post, highlighting the direct financial impact on the public.

The termination of the de minimis exemption means that previously exempt packages will now incur duties, calculated either ad valorem or through a specific duty method for international postal shipments, adding complexity and cost. International postal and shipping services have temporarily halted deliveries to the U.S. to reconfigure their processes for handling the new documentation and duty collection requirements. This has led to concerns about reduced product variety, longer waits, and increased shipping costs for consumers.

Businesses, particularly small importers, face substantial challenges. The American Progress Center estimates that small businesses could pay an average of over $90,000 in tariffs from April to July 2025 alone. The added compliance requirements from the de minimis suspension further exacerbate these burdens, as companies must now manage detailed customs paperwork for every low-value import. Legal challenges to the IEEPA tariffs are ongoing, with a U.S. Court of International Trade ruling in May 2025 deeming them illegal, though they remain in effect pending appeal.

The administration frames these policies as a path to a "Golden Age" of economic prosperity and national resurgence, often linking them to efforts to reduce trade deficits and combat illicit trade. However, critics argue that the increased costs and administrative hurdles disproportionately affect American consumers and businesses, potentially stifling economic growth and investment.