US Duties on Parcels: What Dropshippers Should Do Now

The $800 duty-free threshold for US parcels is gone - every order now pays duty, even a $15 T-shirt. This article covers what exactly changed, who pays now, how to recalculate your prices and show duties at Shopify checkout, and how to vet a supplier so customers don't refuse their parcels.

Step 01Understand what happened to de minimis

De minimis is the rule that let parcels worth up to $800 enter the US duty-free with almost no paperwork. Dropshipping from China ran on it for years: a $10 item shipped straight to the customer, and nobody paid a cent extra.

The rule was wound down in stages:

• May 2, 2025 - the exemption was revoked for goods from China and Hong Kong.
• August 29, 2025 - the suspension was extended to all countries.
• February 2026 - the US Supreme Court struck down the tariffs imposed under IEEPA. A new executive order on February 20 kept the de minimis suspension in place for all countries. Starting February 24, a temporary 10% duty under Section 122 was introduced for 150 days.
• June 24, 2026 - US Customs and Border Protection (CBP) published rules for an indefinite suspension: effective immediately for express and cargo shipments, and from July 24, 2026 for mail, along with a new simplified postal entry process.
• July 1, 2027 - the exemption is repealed for good under the One Big Beautiful Bill Act. Exceptions remain for items bought while traveling and for genuine gifts between individuals.

The law also introduced penalties for using de minimis to get around customs rules: $5,000 for a first violation and up to $10,000 for each one after that. So "gift" schemes and undervalued declarations are a bad idea.

Meanwhile, rates keep shifting. According to the Zonos tracker, the Section 122 duty stopped applying to mail shipments on July 24, 2026, and most countries are now subject to a Section 301 duty instead - 10% or 12.5% depending on the country of origin, on top of regular rates. We haven't verified this change against an official CBP document, so check current rates before you price anything. The text of the suspension rule is published in the Federal Register.

Step 02Decide who pays the duty: DDP or DDU

Someone pays the duty no matter what. The only question is who and when. There are two options.

DDU (DAP) - the customer pays the duty on delivery. The carrier sends them a bill: duty, tax, and often a carrier fee for customs clearance on top. The customer ordered a $40 hoodie, and now they're being asked to pay extra for something nobody warned them about. Many simply refuse the parcel.

A refusal hurts you three ways: the item is lost or comes back at your expense, the customer opens a dispute with the payment provider, and frequent chargebacks are a direct path to a frozen account. We have a separate article on how to avoid that: Stripe Account Blocks: How to Keep Your Account from Being Frozen.

DDP - you pay the duty before delivery. You collect it from the customer at checkout or build it into the price, and the supplier or carrier pays it at customs. The customer gets the parcel with nothing extra to pay.

For retail dropshipping to the US, DDP is the only option that really works right now. Keep DDU for expensive items, if at all, where the customer knows upfront there will be customs clearance and agrees to it.

Step 03Recalculate your product prices

The old "product cost + shipping + markup" formula no longer works. Your landed cost now includes:

• the product's purchase price;
• shipping to the customer;
• duty - a percentage of the customs value that depends on the product code (HS code) and country of manufacture;
• the carrier's or supplier's DDP handling fee, if there is one;
• Shopify's fee for calculating duties, if you collect them at checkout (more on that below).

Here's an example with simple numbers. Product cost $8, shipping $6, and a duty rate of, say, 20% of the product value - that's another $1.60. Your cost is now $15.60 instead of $14. On a $29.99 product, the difference eats a noticeable chunk of your margin, and on cheap $9.99 items the model may stop working altogether.

Don't guess the rate for your product. Find the HS code (your supplier usually knows it) and check the rate in a duty calculator or with your carrier. Rates changed several times in 2026, so recalculate your prices at least once a month.

From there, you have two options: raise the price so the duty is built in, or keep the price and show the duty as a separate line at checkout. The first is simpler for the customer - they see one number. The second is more transparent when different products carry different rates. If you raise prices, review your product pages: the description and photos need to justify the new price. More on that in Shopify Product Page Optimization.

Step 04Set up duties at Shopify checkout

Shopify can calculate import duties and taxes right at checkout, so the customer pays everything at once. Here's how:

1. Add an HS code and country of origin to your products. You can do this in bulk via CSV or the bulk editor. Without them, the calculation will be inaccurate.
2. Go to Settings → Taxes and duties, and in the Duties and import taxes section click Set up, then Agree and activate.
3. If you ship by mail, go to Manage → Related settings and turn on Use postal duty rates into the United States. By default, Shopify uses courier rates, and postal rates may differ. This mode requires a default country of origin.
4. Make sure your carrier supports DDP labels. Otherwise you'll collect the duty from the customer, and the courier will still send them a bill.

Duty calculation isn't free. According to Shopify's help center, the fee is 0.85% per order with Shopify Payments and 1.5% with third-party payment providers. Since February 2, 2025, a temporary 0.5% rate has applied to everyone, but Shopify doesn't say how long it will last. Check the current rate in your admin.

The feature doesn't work with Shopify Fulfillment Network and doesn't support every checkout setup - the full list of limitations is in the same help article.

Step 05Consider US warehouses and suppliers

When you ship from abroad, duty is now charged on every single parcel. There's another way: import goods into the US in one shipment, clear it through customs, and fulfill orders domestically.

Suppliers with local warehouses. Many dropshipping platforms and suppliers have warehouses in the US. Products shipped from there cost more, but the duty is already built into the price, and delivery takes days rather than weeks. To the customer, it looks like a regular American store.

Your own fulfillment. You buy a batch, import it as the importer of record (yourself or through a customs broker), and store it with a fulfillment company. Shipments require a customs bond, and anything over $2,500 needs a formal entry. This is no longer pure dropshipping: you need working capital and a clear idea of which products sell.

A sensible approach: test products with suppliers that have US warehouses, and only stock your own inventory for items that already sell consistently. Working with American services and warehouses is often easier if you have a US company. If you have an LLC, don't forget its reporting obligations - see how to pay the Delaware LLC franchise tax remotely.

Step 06Vet your supplier with a checklist

Before you put a product into ads, ask your supplier the questions below. If they answer "I don't know" to half of them, look for another one.

• Do they ship to the US on DDP terms, and how much does that shipping cost including duty? Ask for a quote for a specific product and weight.
• What are the product's HS code and country of origin? You need them for Shopify, and customs needs them too.
• Do they declare the real value? Undervaluing goods or shipping them as "gifts" is a violation that now carries penalties, and parcels may be held.
• How do they ship: by mail or by courier? Rates and paperwork depend on it.
• Do they have a US warehouse, and which products are in stock there?
• Who is responsible for customs delays, and what happens if a parcel is returned?
• Can you get a tracking number that shows the customs clearance stage?
• How quickly do they respond to rate changes - do they update prices and give advance notice?

Order a sample parcel to yourself or to someone you know in the US. It will show you right away whether a bill for extra charges arrived, how long delivery took, and what condition the item was in.

Wrap-upWhat to do this week

1. List the HS codes and countries of origin for every product in your store.
2. Recalculate your landed cost with duty and drop products whose margin has hit zero.
3. Switch US shipping to DDP, or at least warn customers honestly about the extra charge.
4. Turn on duty calculation in Shopify and check it with a test order.
5. Find at least one supplier with a US warehouse for your best sellers.
6. Mark July 1, 2027 on your calendar: after that date, the exemption is gone by law, and there's no point waiting for it to come back.

Duties haven't killed dropshipping to the US, but they've made it more expensive for anyone still working the old way. If you're just launching and want your store set up for the new rules from day one, get in touch - we'll build your Shopify store and help you with a payment provider.