‘Millions of dollars in lost profit’: Brands are mourning the death of de minimis

The policy reversal is a blow to global behemoths like Shein and Temu, which have used the provision to pad their profits and sell ultra-cheap items to U.S. consumers. But the end of de minimis is also upending the practices of many small U.S. businesses relying on foreign imports. Several footwear and apparel brands told Modern Retail that they are having to pull back on product development, abandon suppliers or raise prices in light of this change.

For many companies already dealing with turmoil from tariffs, the end of de minimis presents another monumental hurdle. “The constantly-changing regulatory environment … has made for a lot of uncertainty,” said Bret Rasmussen, the CEO of Kuru Footwear. “Small American brands like Kuru are creating jobs, solving problems and competing through innovation against the ‘big boys,'” he added. “These policies are making that fight nearly impossible.”

Still, some folks see getting rid of de minimis as leveling the playing field. “Obviously, it’s a hit on our margins to have the added duties, but in some ways, it’s a little bit of a relief to see that the de minimis ruling is now applied across the board,” said Joanna Griffiths, founder of the Canada-based intimates brand Knix.

Trickle-down effects

Kuru Footwear is one of the many brands rushing to retool now that the de minimis provision is gone. The brand — which, like other footwear companies, is particularly susceptible to tariffs — makes the majority of its shoes in China and the rest in Vietnam.

For years, Kuru used the de minimis provision to bring footwear into the U.S. from its warehouse in Canada. That policy “allowed us to pass savings directly to customers,” Rasmussen said. Now, he said, “those savings are gone,” and the company has been forced to raise prices on most styles on its website. In April, it upped the prices of its boots by $10-$15 and the majority of its sandals by $5.

“The end of de minimis will cost us millions of dollars in lost profit,” Rasmussen said.

Kuru is “urgently” relocating production to lower-duty countries, including Cambodia, but already, tariffs and the end of de minimis mean Kuru’s costs are up by 50-70%, Rasmussen said. That’s “not because we’re using better materials or improving the product,” Rasmussen said. “The real tragedy here is the innovation we’re not funding. Every dollar going to tariffs is a dollar not invested in R&D.”

Joe & Bella, an adaptive clothing brand, makes its products in China, although it previously manufactured in Vietnam, Bangladesh and Colombia. It’s taken advantage of the de minimis provision when developing new products — either when its manufacturer sends over the latest prototype, or when a manufacturing run is set to be completed and a unit is sent over for approval or a photoshoot.

For new products, “essentially, every two to four weeks, we’re shipping an individual package back and forth to China,” co-founder and CEO Jimmy Zollo said. Now, with the provision gone, Joe & Bella has to pay duties it wasn’t paying before.

“For one package, it’s not hundreds of dollars, but it will add up over time,” Zollo said. “And it really just slows down an already slow process.”

Spring Riot, a kids’ clothing company using fabric sourced from seaweed and bamboo, has also been forced to make changes with de minimis being wiped out. While the brand manufactures in the U.S., it had been in talks with a mill in India about developing a pants pattern for a small trial run. But founder Leslie Berbit decided to scrap production, as the order wouldn’t be able to come in before de minimis went away. With tariffs added, “the price would be too high to sell a children’s pant at a fair margin,” she told Modern Retail.

“It’s definitely disappointing since I was excited about introducing this piece,” Berbit said. “But moving forward under such a tight deadline could have led to receiving a subpar product, just to beat the tariffs. I’d rather hold off for now than compromise on quality.”

Berbit will continue to work with her partners in the U.S., although she said she is “hopeful” she can resume her relationship with the mill in India if the de minimis provision goes back into place.

Labeling and relabeling

The vast majority of international shipments to the U.S. fall under the de minimis provision. Per the U.S. Customs and Border Protection, 92% of all cargo entering the U.S. is classified under the de minimis label. That adds up to 4 million shipments a day, or more than 1 billion shipments a year.

Before August 29, brands using the de minimis provision weren’t required to use Harmonized Tariff Schedule codes, which explain which products exist in a shipment and which duty rates apply. Now, though, companies are scrambling to compile this information in time in accordance with the new policy.

It’s a difficult process, said Emil Stefanutti, CEO and co-founder of Gaia Dynamics, a platform that uses AI to help customs brokers, importers and exporters deal with regulation compliance. HTS rules have changed 20 times already in 2025. There are some 20,000 unique HTS codes, and using the wrong one could mean getting slapped with a $5,000 penalty.

“Absolutely no one is having fun with this,” Stefanutti said of the hoops that brands are going through around de minimis. “Imagine you’re a big e-commerce company and you ship 1,000 types of products. Now, you’re going to have to include a lot of extra information that you didn’t have to care about before. And, it’s not only getting the data, but it’s also getting it right, which is not easy.”

Sean Henry, CEO and co-founder of Stord, which provides brands with fulfillment services and e-commerce technology, told Modern Retail that “the operational complexity is overwhelming many brands, as is timing.”

“Small businesses that previously never dealt with customs are having to learn fast or hire brokers,” he explained.

At Gaia, the number of companies asking for help is “growing incredibly” — approximately 300% in the last 30 days, Stefanutti said. “We had a customer that showed up [last week] with a list of 30,000 products they needed to classify,” he said. Stord, for its part, created a de minimis guide for its customers.

Still, when it comes to de minimis, many brands are worried about matters other than coding. Those who have had to raise prices — like Kuru — are concerned about staying competitive and ensuring their survival. And it remains to be seen how eliminating the de minimis provision could affect consumer spending and loyalty, especially going into the ultra-important fourth quarter.

“With the holiday shopping season approaching, brands are panicking about meeting customer expectations,” Henry said. “There’s a lot of fear and a lot of confusion,” Stefanutti added.