Until recently, we’ve been able to make use of Section 321 of the U.S. tariff code, which allowed for duty-free direct-to-consumer shipments under $800. That’s now gone.
Although the final rules are still being written, it seems almost certain that:
- Tariff rates on Chinese-made goods will increase
- Section 321 (de minimis) exemptions are unlikely to return
- Direct-to-consumer shipments will now be tariffed at full retail value
- Ocean freight will remain tariffed at essentially production value (i.e. a fraction of retail value)
For small startups like ours, Section 321 was allowing us to ship faster, manage cash flow, and fulfill pre-orders efficiently. Without it, direct-to-consumer air freight becomes drastically more expensive, making it unsustainable at scale.