The headline refers to significant changes in trade policy, specifically the ending of the de minimis exemption for low-value imports, which has a major impact on the dropshipping business model, particularly for goods sourced from China and other foreign countries.

Here is what you need to know about the changes:

Key Change: End of the De Minimis Exemption

    What was the "De Minimis" Exemption? This rule allowed single shipments valued at $800 or less to enter the U.S. duty-free and with minimal customs processing. This loophole was a cornerstone of the profitability for many dropshippers who source cheap goods directly from overseas suppliers, especially in China.

    What Changed? President Trump revoked the de minimis exemption for shipments from certain foreign sources, and later suspended it globally. This means that almost all individual e-commerce packages, regardless of their low value, are now subject to tariffs, duties, and full customs clearance requirements.

Impact on Dropshipping

The policy change has drastically altered the landscape for dropshippers, particularly those relying on cheap, direct-to-consumer imports:

    Skyrocketing Costs: Products that were previously duty-free now face import tariffs, which can be substantial (potentially stacking up to 145% or more on Chinese goods). This addition of tariffs and new customs processing fees (estimated at $25−$40 per shipment for small orders) severely erodes profit margins for low-priced items.

    Increased Customer Friction: In many cases, customers may be greeted by an unexpected bill from the courier or postal service for customs duties and fees upon delivery. This leads to poor customer experience, negative reviews, and higher return rates.

    Slower Shipping: The removal of the expedited clearance means more parcels require full customs processing, which can lead to longer, unpredictable shipping delays.

How Dropshippers Can Adapt

The consensus among e-commerce experts is that dropshipping is not entirely "dead," but the previous low-ticket, high-volume model relying on cheap foreign imports is no longer sustainable. Sellers are pivoting by:

    Sourcing Locally: Switching to U.S., Canadian, or other non-tariff-affected suppliers to benefit from faster shipping and avoid import duties.

    Focusing on High-Ticket Items: Selling more expensive products with larger profit margins to absorb the new duty and customs costs.

    Bulk Shipping: Moving away from individual direct-to-consumer shipments by importing goods in bulk, storing them in U.S. warehouses, and shipping to customers domestically (a hybrid model similar to Amazon FBA).

    Selling to Other Markets: Shifting focus to consumers in countries that still have favorable de minimis rules or different trade agreements.