The End of Duty-Free Imports: What Our US Customers Need to Know
For years, the US de minimis rule has been the backbone of cross-border e-commerce and just-in-time fulfilment. What will happen now that it has been eliminated?
Kowide Outdoors is a bespoke backpack and technical outerwear manufacturer with our factory in Vietnam near Ho Chi Minh City. With over 50 years of experience manufacturing products for clients worldwide, we have navigated shifting trade winds before, and right now, there's a significant one on the horizon that directly affects our US-based brand partners. We want to be transparent about what's coming, what it means for you, and how we are already working to help you get ahead of it.
What Has Changed – USA de minimis rule
For years, the US de minimis rule, known in trade circles as Section 321, has allowed commercial shipments valued under $800 to enter the United States duty-free, with minimal customs paperwork. This provision became the backbone of cross-border e-commerce and just-in-time fulfilment for thousands of brands, including many of the outdoor gear and apparel labels we are proud to manufacture for.
That era has ended. As of August 29, 2025, the commercial de minimis exemption was eliminated under the new US trade policy. Every shipment, regardless of value, will now require a formal customs entry and will be subject to applicable duties. For brands importing custom backpacks, technical outerwear, and specialty gear from Vietnam, this is a material change.
To Note:
Since the Supreme Court's February 20, 2026, ruling that the IEEPA does not authorize the President to impose tariffs, the legality of the “De minimis” elimination has come under scrutiny. There is an ongoing court proceeding in the Court of International Trade, Axle of Dearborn v. Department of Commerce, with briefs due through April 23, 2026. The subsequent ruling might overturn the elimination of “de minimis”.
However, that said, Congress has already legislated an end to the “de minimis” exemption by passing the “One Big Beautiful Bill Act” in June of last year (2025). That bill set a two-year window before implementation, with an effective date of July 2027. So, either way, the long-term direction is clear: the end of the “de minimis” exemption.
How This Affects You as a Kowide Customer
If your fulfilment model has relied on shipping lower-value individual orders directly from our factory to US customers, here's what you can expect:
Duties on every shipment. There will no longer be a value floor below which imports skate through duty-free. Each order entering the US will incur a tariff, regardless of whether it's a single unit or a full container.
More customs paperwork. Formal entry requirements mean more documentation per shipment, more time, greater administrative overhead, and a higher risk of border delays if filings aren't airtight.
Tighter enforcement. US Customs and Border Protection will be applying stricter scrutiny. Misclassification or undervaluation, even unintentional, carries real penalties.
Margin pressure. For brands that have built their pricing and landed cost models around the “de minimis” advantage, these new costs will require a hard look at how products are priced, where inventory is held, and how orders are fulfilled.
What We're Doing About It
We have been through major trade shifts before, from the early days of US-Asia manufacturing partnerships through the waves of tariff changes in recent years. Our position as a vertically integrated OEM manufacturer, with offices in Taipei, Ho Chi Minh City, and New York, means we're well-placed to help our clients adapt.
Here's how we're already supporting our US partners through this transition:
Consolidation strategies. One of the most effective ways to reduce per-unit import costs is to consolidate shipments, moving from frequent small parcels to larger, planned bulk orders. We can work with you to restructure production schedules and shipping cadences to make this practical.
Fulfilment model review. For brands currently drop-shipping direct from Vietnam, it may make sense to shift to a US-based fulfilment hub model.
Accurate documentation and classification. Getting HTS codes right and ensuring valuation and origin declarations are accurate has never been more important. As your manufacturing partner, we are committed to providing complete and accurate documentation for every shipment.
Lead time planning. Customs delays are a real risk under the new regime, particularly in the early months as new systems and processes begin. We strongly recommend building an additional buffer into your inventory planning.
Our Recommendation: Start Now
August 29, 2025, has already passed. Even if the court overrules the elimination of “de minimis”, Congress has already approved a bill to end it in the summer of 2027. Rebuilding a fulfilment model, onboarding a US-based 3PL (third-party logistics), adjusting pricing for the market, and ensuring your customs compliance is airtight; none of these happen overnight.
The brands that will weather this change best are those that treat it as a strategic opportunity rather than a disruption. This is a moment to step back and ask: Is our supply chain built for the next decade of trade or the last?
At Kowide Outdoors, our mission has always been to be more than a factory; we want to be a genuine manufacturing partner that helps our clients succeed.
For a more in-depth summary of the current status of USA import tariffs, please read our recent blog post on this subject:
Vietnam Manufacturing Tariffs 2026: U.S. Trade Update for Backpack & Outerwear Brands
Kowide Outdoors – Who We Are
We specialize in OEM backpack manufacturing, technical outerwear production, and Vietnam-based supply chain solutions for global brands. from Taiwan, operating as both a custom backpack manufacturer and a trusted outerwear manufacturer for global brands.
A leading OEM manufacturer with over 50 years of experience supplying products to world-renowned brands across Europe, Asia, Australia, and North America. Our world-class
Reach out to us at kowideoutdoors.com/contact
