What’s Tariff Stacking & Why the Death of China De Minimis Requires a Second Look
The China De Minimis “Loophole” as CBP refers to it, was closed as of May 2nd. This means that all goods from China regardless of value must pay duties. For those who were utilizing near-shored supply chains with direct-to-consumer shipping under Section 321, this change has brought forward a few very important factors that companies need to review and consider:
China goods formerly entered under De Minimis were not subject to the original 301 trump tariffs.
As of May 2nd 2025, China goods entered for consumption under Type 11 informal entry or Type 01 formal entry may be subject to original 301 Trump duties depending on the HTS code.
Tariff stacking is also required for both Type 11 informal entry and Type 01 formal entry:
*For illustrative reference only, not to be used in place of legal advice.
Valuation or appraisement of the goods should also be reviewed in accordance with Section 402 of the Tariff Act of 1930, as amended (19 U.S.C. § 1401a) eCFR :: 19 CFR Part 152 -- Classification and Appraisement of Merchandise
“First Sale” has rules, importers should review and seek expert assistance before utilizing this method of valuation First Sale Declaration | U.S. Customs and Border Protection
5/7/2025 CBP published updated E-Commerce FAQ to help guide the trade on the new regulations E-Commerce Frequently Asked Questions | U.S. Customs and Border Protection
The Math:
MFN Rate + Original 301 duties (if applicable) 7.5% or 25% + CN/HK IEEPA 20% +
CN/HK/MACAU Reciprocal Tariffs as of 4/10, 125% (if applicable e.g. not 232)
OR 232 Steel & Alum & Derivatives, 25% (if applicable),+ADD/CVD (if applicable)
*For illustrative reference only, not to be used in place of legal advice.
Conclusion:
Enforcement is the top priority and topic at the 2025 Trade & Cargo Security Summit hosted by CBP. Don’t get sucked into what you might read on social media platforms or feel pressure from your logistics providers to circumvent these requirements. If you can search and find your product for sale on the web, so can Customs. Be sure your value, description, and country of origin, and recipient of your goods, is clearly indicated and correct to avoid Customs delays and possible enforcement actions.
An effective cross-border trade strategy is essential for companies navigating the complexities of international markets. It involves developing a comprehensive approach to manage tariffs, duties, regulatory requirements, and supply chain logistics across multiple jurisdictions. By aligning trade practices with both global and local regulations, businesses can optimize customs clearance, reduce costs, and avoid compliance risks. A well-executed strategy not only ensures seamless movement of goods but also identifies opportunities for preferential trade programs, such as Free Trade Agreements, Foreign Trade Zones and Duty Drawback initiatives. Evolution Trade Solutions LLC. provides a proactive cross-border trade strategy, where companies can enhance market access, improve profitability, and maintain a competitive edge in the ever-evolving global marketplace.
