United States Suspends Duty-Free De Minimis Treatment for All Countries
Executive Order: SUSPENDING DUTY-FREE DE MINIMIS TREATMENT FOR ALL COUNTRIES
July 30, 2025
Section 1: Background
Border Security and Drug Trafficking
- National Emergency Declarations: Two separate national emergencies were declared on February 1, 2025, addressing drug trafficking threats at both northern (Canada) and southern (Mexico) borders
- Executive Order 14193 (Northern Border): Targets Canada’s failure to intercept drug trafficking organizations, criminals, and illicit drugs like fentanyl
- Executive Order 14194 (Southern Border): Addresses Mexico’s inadequate efforts to combat drug trafficking organizations and human traffickers
- Initial Action: Both orders suspended duty-free de minimis treatment for specific articles under 19 U.S.C. 1321(a)(2)(C)
- March 2025 Amendments: Executive Orders 14226 and 14227 paused the duty suspensions until the Secretary of Commerce confirms adequate processing systems are operational
Trade Duties and De Minimis Treatment
- National Emergency Declared: Executive Order 14195 (Feb 1, 2025) declared national emergency due to China’s failure to intercept synthetic opioid supply chains and criminal organizations
- Initial Suspension: Suspended duty-free de minimis treatment for Chinese articles, then paused implementation in Executive Order 14200 (Feb 5, 2025) pending adequate processing systems
Phased Implementation:
- Executive Order 14256 (April 2, 2025): Reinstated suspension for PRC and Hong Kong products after Secretary confirmed adequate systems
- Executive Order 14257 (April 2, 2025): Addressed persistent U.S. trade deficits through reciprocal tariffs
- Current Status: Secretary has notified that global processing systems are now operational for duty collection on articles previously eligible for duty-free treatment
- Final Determination: Suspension of duty-free de minimis treatment remains necessary and appropriate to address extraordinary threats to U.S. national security, foreign policy, and economic interests from sources outside the United States
Key Determinations on Duty-Free De Minimis Treatment Suspension
- Main Action: Suspension of duty-free de minimis treatment under 19 U.S.C. 1321(a)(2)(C) for multiple countries and regions
- Canadian Goods: Suspended to address emergency declared in Executive Order 14193 (as amended)
- Mexican Goods: Suspended to address emergency declared in Executive Order 14194 (as amended)
- PRC and Hong Kong Goods: Continued suspension to address emergency declared in Executive Order 14195 (as amended)
- Global Suspension: Applied worldwide to address emergency declared in Executive Order 14257 (as amended)
Primary Concerns:
- Preventing tariff evasion through deceptive shipping practices
- Combating illicit drug importation risks
- Addressing fraudulent invoices, false postage, and deceptive packaging
Risk Factor: Each determination operates independently from others, with each targeting its specific emergency declaration. Low-value articles previously eligible for duty-free treatment pose particularly high risks for evasion and illicit activities
Section 2. Suspension of Duty-Free de minimis Treatment
The duty-free exemption under 19 U.S.C. 1321(a)(2)(C) no longer applies to shipments not covered by 50 U.S.C. 1702(b), regardless of value, origin, or transportation method.
Non-Postal Shipments: All shipments (except international postal) must now pay full duties, taxes, fees, and charges. Entry must be filed in the Automated Commercial Environment (ACE) by qualified parties.
International Postal Network Exception: Postal shipments that previously qualified for de minimis exemption remain duty-free except for specific rates outlined in section 3, with no CBP entry preparation required.
Transitional Period: The postal exemption continues until CBP establishes and publishes a new entry process in the Federal Register.
Immediate Implementation: These changes affect all shipments that previously qualified for the exemption before this order’s effective date.
Section 3. Duty Rates for International Postal Shipments
Core Requirements
- Transportation carriers delivering shipments to the US through international postal networks must collect and remit duties to CBP using specified methodologies
- Carriers must apply the same methodology consistently across all shipments during any given period
- Methodology changes permitted maximum once per calendar month with 24-hour advance notice to CBP
Duty Assessment Methods
Method A: Ad Valorem Duty (Subsection b)
- Duty equals the effective IEEPA tariff rate applicable to the product’s country of origin
- Applied to the value of each dutiable postal package containing goods for consumption
Method B: Specific Duty (Subsection c)
• Fixed rates per package based on country’s effective IEEPA tariff rate:
- Less than 16%: $80 per item
- 16-25% (inclusive): $160 per item
- Above 25%: $200 per item
- Country of origin declaration mandatory for all international postal shipments under both methodologies
- Specific duty methodology available for 6 months only from effective date
- After 6-month period, all shipments must use ad valorem methodology (Method A)
Special Exceptions
- Shipments subject to antidumping and countervailing duties or quotas must continue using appropriate ACE entry types
- These special cases remain governed by existing applicable regulations
Section 4. Implementation
- Effective Date: New requirements take effect at 12:01 a.m. Eastern Daylight Time on August 29, 2025 for all goods entered for consumption or withdrawn from warehouse for consumption
- Superseding Authority: This order replaces section 2 of Executive Order 14256 (as amended) for goods processed on or after the August 29, 2025 effective date
Enhanced Bonding Requirements:
- Customs and Border Protection (CBP) can require basic importation and entry bonds for informal entries valued at $2,500 or less
- International carriers transporting postal shipments to the U.S. must maintain international carrier bonds to ensure duty payment
- CBP has authority to ensure bond amounts are sufficient to cover required duties
Duty Remittance Assurance: New bonding requirements specifically target ensuring proper duty collection and compliance with legal requirements for international shipments
Section 5. Definition
The “effective IEEPA tariff rate” represents the total duty rate imposed on imported articles during national emergencies declared under the International Emergency Economic Powers Act (IEEPA)
Multiple Executive Orders work together to create this tariff structure:
- Executive Order 14257 (as amended)
- Executive Order 14193 (as amended)
- Executive Order 14194 (as amended)
- Executive Order 14195 (as amended)
Stacking Rules: The rate calculation follows specific stacking guidelines established in Executive Order 14289 from April 29, 2025, titled “Addressing Certain Tariffs on Imported Articles”
Future Applications: The definition encompasses any subsequent orders or proclamations that address tariff stacking or applicability under IEEPA authority
Section 6. Severability
Severability Protection: If any part of this executive order becomes invalid, the remaining provisions continue to operate normally without disruption
Independent Suspension Authority: Even if additional duties from previous executive orders (14193, 14194, 14195, or 14257) are ruled invalid, the suspension of duty-free de minimis treatment remains fully enforceable
Legal Foundation: The President maintains authority under 50 U.S.C. 1702(a)(1)(B) to regulate importation and nullify certain property rights to address national security emergencies
Section 7. General Provisions
- Existing powers remain intact – Nothing in the order affects the legal authority already granted to executive departments, agencies, or their leadership
- Budget oversight preserved – The Director of the Office of Management and Budget retains all functions related to budgetary, administrative, and legislative proposals
- No interference with established hierarchy – Current governmental authority structures continue unchanged
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