We’re still in the early portion of 2025, but we already have a strong contender for Word of the Year: Tariffs. Since inauguration day, tariffs have dominated the headlines with back-and-forth changes happening almost on a daily basis. This has made it difficult for supply chain and global trade professionals to keep up. One of the big changes has dealt with de minimis entries. This was a hot topic at the Descartes Innovation Forum last October where I moderated a panel discussion with customs officials, freight forwarders, and brokers on the proposed changes to the de minimis regulations. So, what is a de minimis entry? What’s changed? What impact is this having on the industry? How can companies prepare for any additional changes? Those are the questions I asked Glenn Palanacki, VP Industry Solutions Broker and Forwarder at Descartes Systems Group on a recent episode of Talking Logistics.
What is a De Minimis Entry?
To level-set for those unfamiliar with these regulations, I asked Glenn to explain what a de minimis entry is and how they work. Glenn states that de minimis is a way to simplify and speed up entry into the country of low-risk shipments valued at $800 or less. These shipments are exempt from paying duties and taxes. Today this involves millions of shipments per month, mostly from e-commerce. “As consumers, this allows us to get fast, low-cost shipments from anywhere in the world without worrying about add-on fees or charges,” he says.
“This is not intended for goods such as pharmaceuticals, alcohol, tobacco, or firearms which are subject to government inspections and control at the border,” Glenn adds. “They’re intended more for easy fulfillment of what we call ‘social selling’ [items sold via social media, like apparel, that come from China and other places overseas] even though the exemptions have been around for almost 100 years, albeit with a $200 limit until 2016.”
How Does this Process Work?
Glenn explains that due to the immense volumes of these shipments, filings are handled electronically as proscribed by Section 321 Type 86 of U.S. customs regulations, as he explains in the short clip below:
“There are really two parts to it,” added Glenn. “There is the security filing that’s through ACAS (the Air Cargo Advanced Screening) and then you have the declaration side which is under Section 321. The pilot program that was created in 2019 was in response to the growth of e-commerce. 100 years ago we couldn’t have imagined ‘social selling’ or just how supply chains would grow globally, so that pilot was intended to electronically risk and then clear low-risk entries under the thresholds published.”
De Minimis Entries from China
On February 1, 2025, the new Trump administration ended de minimis entries from China with little warning. What was the impact? Glenn comments that this caused immediate disruptions across the supply chain:
Glenn added that software providers like Descartes suddenly had to update their systems to properly address these changes. These had to be quickly developed, tested and rolled out to the marketplace. Shippers also had to immediately make decisions on whether to absorb these new charges or pass them onto customers. “Confusion and disruptions reigned for that week,” says Glenn.
Less than a week later the administration rescinded this change, thus reinstating de minimis entries from China, which caused more chaos and confusion. “It was confusion on top of confusion,” said Glenn.
Dealing with the Unknown
Based on the recent flip-flop of de minimis regulations, perhaps the only thing that is clear about future changes is that nobody knows what they will be or how long companies will have to implement them. How can companies deal with this uncertainty? Glenn had some good suggestions, so I recommend you watch the full episode for all of his insights and advice. Then keep the conversation going by sharing your own comments and questions.
