The end of 800$ De Mimis Exemption- What does this mean for Etsy sellers?
Published onWhat is de minimis rule
De minimis is an $800 exemption applied on goods being transported to the USA. Anything under $800 would not be required to pay tax or tariff to the US government. That means people outside the US could sell goods at cheaper and more reasonable prices, and people in the US had more options to buy goods at affordable rates. It was a major reason online platforms like Temu, Shein, and many Etsy sellers around the world could offer ultra-cheap shipping and products (Source)
What happens after the de minimis has ended
On August 29, 2025, the U.S. government will officially end the $800 de minimis exemption, the rule that let small orders enter the country duty-free and with minimal paperwork (Source – GQ )
What does this mean for Etsy sellers
This simply means that Etsy sellers based outside the USA selling handmade items are going to have a tough time. It’s a gut punch. Etsy has depended on impulse buys and artists being able to sell their heartfelt creations from all over the world. This is just sad.
What changes on August 29, 2025
A July 30, 2025 executive order suspends the de minimis exemption for all countries, not just China and Hong Kong.
After midnight on August 29, every shipment (regardless of value) will face full customs duties and be subject to formal entry through ACE (Automated Commercial Environment).
What happens for postal shipments (USPS + Foreign Postal Services) after Aug 29, 2025
Phase 1 – “Grace Period” (Aug 29, 2025 → Feb 28, 2026)
If you ship with USPS or through your country’s postal system (not DHL/FedEx/UPS), your postal service can choose one of these duty payment methods per shipment:
- Ad Valorem – Pay a % of the package’s value based on your country’s “IEEPA tariff rate.”
- Example: If your country’s rate is 20% and your product value is $100, duty = $20.
- Flat Fee per Item – A fixed amount based on your country’s tariff category:
- $80 per package if your country’s rate is less than 16%.
- $160 per package if your country’s rate is 16% to 25%.
- $200 per package if your country’s rate is more than 25%.
Country of origin MUST be declared on customs forms.
Phase 2 – after grace period (From March 1, 2026)
- No more flat fee option.
- Everything goes to ad valorem only (percentage-based duty).
- Your package’s duty = item value × your country’s tariff rate (plus any other applicable US duties).
NOTE – This grace period only applies to postal shipments.
If you use couriers like DHL, UPS, or FedEx → you pay normal US duties immediately after Aug 29, 2025 (no $800 exemption, no grace).
- Even during the grace period, carriers can still choose the percentage method instead of the flat fee, meaning you might not even get the flat-fee benefit.
“Which countries fall into which postal flat-fee tier?”
During the 6-month postal window, the flat fee depends on the country’s IEEPA “reciprocal tariff” rate. The White House published an Annex I with country rates; below are common Etsy origins pulled from that annex, with the postal flat fee tier that would apply if a carrier chooses the flat-fee method. (Annex I PDF)
How to read this: If a package’s origin country has an IEEPA rate …
• <16% → $80 flat per item
• 16–25% → $160 flat per item
• >25% → $200 flat per item
(Executive Order text)
| Country / Bloc (origin) | IEEPA rate (Annex I) | Postal flat-fee tier (Aug 29–Feb 28) |
|---|---|---|
| European Union (member states) | 20% | $160 per item |
| India | 26% | $200 per item |
| China | 34% | $200 per item |
| Japan | 24% | $160 per item |
| Israel | 17% | $160 per item |
| Cambodia | 49% | $200 per item |
| Laos | 48% | $200 per item |
| Switzerland | 39% | $200 per item |
| Fiji | 32% | $200 per item |
| Côte d’Ivoire | 21% | $160 per item |
(You can check the full list here – Annex 1)
Example of how tariff can effect your product prices
Jewelry finding from EU, $40 customs value
• During grace period: flat $160 per item (EU rate 20% ⇒ 16–25% tier), or ad valorem $8. (EO + Annex I) The White House+1
• After grace period: ad valorem only → $8 (plus other duties if applicable).
Grace period starts from March 1, 2026
How tariffs might affect top regions with the most Etsy shops
When we look at where Etsy sellers are actually based, some of the biggest communities sit in countries directly impacted by the new tariff rules. Here’s a breakdown:
- Italy – 28,017 shops. Italy isn’t listed separately in Annex I because it’s part of the European Union, which has a 20% reciprocal tariff.
- Grace period impact: $160 flat fee per item for postal shipments, or 20% ad valorem if the carrier chooses that method.
- After March 1, 2026: 20% ad valorem on every item.
- Spain – 27,679 shops. Same situation as Italy — part of the European Union with a 20% tariff.
- Grace period impact: $160 flat fee per item or 20% ad valorem.
- After March 1, 2026: 20% ad valorem.
- India – 23,629 shops. Specifically listed in Annex I with a 26% tariff, putting it in the highest fee tier.
- Grace period impact: $200 flat fee per item or 26% ad valorem.
- After March 1, 2026: 26% ad valorem.
- France – 63,986 shops. Like Italy and Spain, it’s part of the European Union with a 20% tariff.
- Grace period impact: $160 flat fee per item or 20% ad valorem.
- After March 1, 2026: 20% ad valorem.
What this means:
For EU sellers (France, Italy, Spain), the $160-per-item postal flat fee during the grace period could make lower-cost handmade items completely unaffordable for U.S. buyers. Indian sellers face an even steeper $200 flat fee per item if postal carriers use the flat-fee method.
Why this feels like a misguided move
- The official reason: stopping illicit shipments (like fentanyl) smuggled through low-value packages, and closing trade loopholes (source)
- This shotgun approach ignores that 90% of cargo seizures originate from de minimis shipments, many of which are perfectly legitimate
In effect, thousands of creative micro-businesses get hit because of a problem they didn’t create.
Action plan for Etsy sellers
- Start crunching numbers for what your product charges will look like during phase 1 and after the grace period.
- Your product may become affordable again during the grace period, depending on carrier choice.
- For non-handmade sellers, explore US print-on-demand options for a while.
- Update your audience about these changes in your shop’s announcement section if possible. Not many people stay up to date with government policies, which might end up ruining the impression of your shop