Section 321 is gone: how US DTC brands are restructuring their supply chains

Section 321 is gone. Executive Order 14324 ended the $800 de minimis exemption for every country of origin from August 29, 2025, and a federal court upheld that rescission in August 2026. Every parcel that once cleared duty-free now owes the ordinary tariff rate, so US direct-to-consumer brands are restructuring how they import.

This guide covers what changed, what's still being contested, and how brands are reworking their supply chains now that de minimis is gone for good.

Last checked: November 7, 2026.

The pain points

• "Every parcel I ship now gets a duty bill, and I don't know how to price around it."

• "My broker says Type 86 doesn't work anymore and I don't understand what replaces it."

• "We built our whole model on $800 parcels clearing free, and that model is gone."

• "I keep seeing different end dates for this rule and I don't know which one is real."

• "Our carrier changed how it bills duty and the invoice doesn't match what we were told."

What ended Section 321, and when

The China and Hong Kong exemption went first. Executive Order 14256, signed April 2, 2025, removed duty-free de minimis treatment under 19 U.S.C. 1321(a)(2)(C) for goods of China and Hong Kong, effective May 2, 2025, covering postal and non-postal low-value shipments alike.

The global removal followed. Executive Order 14324, signed July 30, 2025, ended de minimis under 19 U.S.C. 1321(a)(2)(C) for every country of origin, effective August 29, 2025, for both postal and non-postal shipments. Postal items are now dutied under CBP's interim postal process, at a rate set by proclamation; that rate, and the ordinary ad valorem duty rates for many countries, changed more than once during 2026. Check the current Harmonized Tariff Schedule and your broker for today's rate rather than a figure you saw earlier in the year. Non-postal low-value shipments moved straight to formal or informal entry with ordinary duty from day one.

On June 24, 2026, CBP turned the suspension into standing regulation rather than leaving it as executive-order policy alone, through two parallel rulemakings covering non-postal shipments and a new postal informal entry process. Type 86 informal entry, the route many low-value shipments used before, stopped accepting filings for de minimis shipments from the August 29, 2025 effective date; low-value imports now move through standard informal or formal entry like any other import.

What's coming next: CBP's proposed Low-Value Shipments rule

On October 8, 2026, CBP published a proposed rule, "Low-Value Shipments," in the Federal Register. It would set informal entry for shipments valued at $2,500 or less, filed electronically on or before importation, create a new Type 13 electronic entry for postal shipments, and require a bond for both Type 11 and Type 13 entries. Comments close December 7, 2026, and CBP expects the rule to take effect in 2027. If finalized, it changes how low-value shipments are filed again, so don't build a permanent process around today's rules alone.

Is this still being contested?

Two separate court cases touch this, and they answer different questions. The Supreme Court ruled 6 to 3 in Learning Resources, Inc. v. Trump (consolidated with Trump v. V.O.S. Selections) on February 20, 2026 that the International Emergency Economic Powers Act doesn't authorize the president to impose tariffs generally. That ruling didn't decide the de minimis question, which wasn't before the Court.

Executive Order 14388, "Continuing the Suspension of Duty-Free De Minimis Treatment for All Countries," signed the same day, February 20, 2026, continued the de minimis suspension on its own legal footing, separate from the general tariff authority the Court rejected. It took effect at 12:01 a.m. EST on February 24, 2026, and was published in the Federal Register on February 25, 2026.

The de minimis rescission was also challenged separately, in Axle of Dearborn, Inc. (doing business as Detroit Axle) v. Department of Commerce at the Court of International Trade. On August 13, 2026, the court upheld the rescission, treating it as a distinct exercise of IEEPA power separate from the general tariff authority the Supreme Court rejected. An appeal to the Federal Circuit is possible; this guide doesn't say whether one has been filed.

How carriers reacted

USPS briefly paused, then resumed within about a day, inbound parcels from China and Hong Kong in early February 2025 while it built a way to collect the new duty. DHL and Deutsche Post are reported to have suspended some business-customer parcels into the US around the August 2025 global change. Carrier policies move with the rules, so check each carrier's own current US-bound guidance rather than relying on a snapshot here.

How DTC brands are restructuring

With duty due on every shipment, the per-parcel model many brands built around de minimis no longer clears the same margin. Reported responses include:

• Bulk, consolidated formal entry: moving from many individual low-value parcels shipped direct from overseas to one larger shipment, cleared once through standard customs entry into a US-based 3PL warehouse, then shipped domestically. Duty is paid once per shipment instead of once per parcel, and brokerage cost spreads across the whole load.

• Bonded warehouses and Foreign Trade Zones: some brands are storing imported stock with duty payment deferred until it leaves the zone for sale, which can help cash flow against paying duty on a full bulk shipment upfront. Not every 3PL offers this, and it adds its own paperwork on withdrawal.

• Nearshoring and SKU pruning: brands are weighing nearer-shore sourcing, and some are cutting low-margin SKUs that can no longer absorb duty on top of their existing cost.

• Absorb or pass through: reporting is mixed on whether brands are absorbing the new duty to protect price points or passing it on through higher prices or a separate duty line at checkout. Decide this from your own margin, not a general rule.

Our guide to landed cost in a 3PL quote covers the lines to ask for when you reprice a bulk-import model against your current per-parcel one.

What to ask a customs broker or 3PL

• Are you filing informal or formal entries for my shipments, and has that changed since de minimis ended?

• What's my actual landed cost per unit now that duty applies to every shipment, not just those over $800?

• Do you offer bonded warehouse or Foreign Trade Zone storage, and does it make sense at my volume?

• How are you calculating duty today: ad valorem only, or is a flat per-package postal option still being used anywhere on my account?

• What happens to shipments that were already in transit when a rule changed?

Our recommendation: rebuild your landed cost now, not later

1. Pull your last three months of US-bound shipments and reclassify each one under formal or informal entry, with duty at the ordinary ad valorem rate for its tariff classification.

2. Ask your broker or 3PL for your actual current landed cost per unit, including any country-specific surcharge still in force for your product's origin.

3. Price duty into your margin or your checkout total, rather than finding out from a bill afterward.

4. Get a quote for consolidated bulk import into a US warehouse against your current per-parcel model.

5. Ask whether bonded warehouse or Foreign Trade Zone storage is worth it at your volume.

6. Review your SKU list for anything that no longer clears a margin once duty applies to every unit.

What waiting costs

Every month you price as if some parcels still clear duty-free costs margin, since none do anymore, and a model built for Type 86 entry that nobody has rebuilt risks a shipment getting held at the border until it's refiled correctly.

These figures are made up to show the method. A brand ships 3,000 parcels a month from overseas at an average declared value of $28. At an illustrative 15% duty rate, each parcel now owes $4.20 it didn't owe before August 2025, or $12,600 a month. Moving to one consolidated bulk shipment a month into a US warehouse, the same goods clear once: freight and brokerage add about $0.60 a unit, duty stays the same $4.20 a unit, but there's no separate customs processing charge repeated 3,000 times over. On these figures, bulk import saves the brand roughly $1,800 a month in processing charges alone, before any freight saving from shipping in volume. These figures are made up to show the method.

People Also Ask

Is Section 321 completely gone, or does any de minimis exemption remain?

Yes, it's gone for ecommerce purposes. Executive Order 14324 ended duty-free de minimis treatment for every country of origin from August 29, 2025, and CBP made that suspension indefinite through rulemaking in June 2026. No country currently keeps an exemption for low-value parcels.

Can I still use Type 86 entry for low-value shipments?

No. CBP stopped accepting Type 86 filings for de minimis shipments from the August 29, 2025 effective date. Low-value shipments now move through standard informal or formal entry like any other import.

Is the de minimis suspension being challenged in court?

Yes, separately from the tariff cases. The Court of International Trade upheld the rescission in Axle of Dearborn v. Department of Commerce in August 2026, distinguishing it from the tariff authority the Supreme Court rejected in Learning Resources v. Trump. An appeal to the Federal Circuit is possible, so check for updates before you assume the current rules will hold indefinitely.

Finding the right 3PL partner

Logan, FulfilQ's advisor on the website, matches brands to verified providers by order volume, product type and region. Tell Logan your monthly US orders, where your goods are made and how you ship today, and you get a shortlist to ask about bulk import, bonded storage and landed cost under the new duty rules. Start at fulfilq.com and Ask Logan, or Submit an RFP and verified providers come back to you. You can also browse the full provider directory.