The End of De Minimis: How Abolishing Section 321 effects you.

Introduction

This is the third piece in our tariff-series. After covering broad tariff wars and how dealers are adapting, we now focus on a structural change with wide repercussions. The U.S. decision to suspend/phase out the Section 321 De Minimis Exemption that once allowed low-value parcels (under $800) to enter duty-free. That change removed a major loophole that flooded the U.S. market with inexpensive, often low-quality goods including large volumes of low-cost fitness accessories and even complete gym items from overseas sellers. Now, the landscape is changing. For some dealers this means disruption; for many U.S. and higher-quality non-U.S. makers, it opens a strategic opportunity to win market share and premium pricing.

What was Section 321 (De Minimis) and why did it matter?

Section 321 allowed commercial shipments with a customs value below $800 to enter the United States with expedited, duty-free treatment. The rule helped power the rise of D2C e-commerce and cross-border platforms by reducing landed cost, and paperwork for small parcels. Over the last decade usage exploded. CBP data show de minimis shipments rose from roughly 139 million in FY2015 to more than 1.36 billion in FY2024. That huge flow of low-value parcels, many sourced directly from Chinese sellers. The parcels kept consumer prices low but complicated customs enforcement and trade protections.

What changed and when

Policymakers and CBP flagged the growth in de minimis volumes as a problem. In 2025 CBP proposed new rules and guidance to curtail de minimis eligibility for shipments subject to other tariff actions (Sections 301, 232, etc.). Then the White House and administration actions accelerated change, targeted suspensions and eventual broader removal of de minimis treatment for affected origins were rolled out in 2025. The practical effect was that many low-value imports from China and other flagged countries became subject to normal duties and enhanced enforcement. Major logistics players and analysts confirmed the change and predicted material effects on parcel volumes, carrier earnings and the e-commerce model.

How de minimis shaped the fitness equipment space

Fitness is a mixed product category. Heavy machines (treadmills, racks) usually moved via freight and failed to rely on de minimis. But a huge market for accessories, resistance bands, small dumbbells, apparel, replacement parts and cheap home-gym add-ons grew around low-cost cross-border parcels. Low prices allowed many online sellers to undercut domestic makers, and the market became crowded with low-quality imports that eroded brand perception for everyone. Small U.S. manufacturers who built to higher safety and durability standards frequently could not match price after price. Now, with de minimis curtailed, that artificial price advantage is shrinking.

Immediate effects: dealers, marketplaces and short-term winners/losers

Short term, many small dealers and marketplace sellers who relied on dropshipping and ultra-low-cost imports face higher landed costs and slower fulfillment. For platforms that handled millions of de minimis parcels, the change means new duties, more customs forms and potentially higher prices for customers. Carriers and logistics providers reported measurable revenue and volume impacts as parcel flows rebalanced. At the same time, some dealers are already pivoting: they are buying inventory locally, pre-stocking premium lines, and actively hunting for non-U.S. brands that offer better durability and service.

Why this is a strategic opportunity for U.S. and high-quality non-U.S. brands

1. Level playing field on price.

With duty-free cheap imports curtailed, U.S. small and medium manufacturers can more competitively price higher-quality products without being undercut by low-cost imports that previously skirted tariffs. This helps convert value-driven buyers who previously chose price over quality.

2. Made-in-USA becomes a stronger proposition.

Domestic manufacturers can legitimately promote safety, warranty, and local support as differentiators. Buyers who previously accepted cheap quality for a low price may now choose durability and service. This helps dealers sell higher-margin machines and accessories.

3. Dealership openings and fast wins.

Many established distributors that previously favoured big U.S. suppliers are urgently seeking alternatives to fill gaps in inventory. That means quick sales and dealership opportunities for smaller, reputable brands that can move fast. In short: brands that are “ready” get a shot at partnerships they might never have had. (This is a business development win if you can show reliability, certification and a speedy supply plan.)

4. Improved product safety and brand trust,

Lower incidence of poor-quality imports leads to fewer product returns, fewer safety incidents and better long-term brand equity for premium manufacturers. That benefits the entire industry.

What brands need to do now (practical checklist)

Document supply chain and compliance: Ensure correct HS codes, country of origin records, and customs paperwork.
Revisit pricing and margins: Factor in any reinstated duties and offer clear value propositions (warranty, after-sales).
Build inventory and logistics options: Consider local warehousing or near-shore assembly to reduce lead times.
Target distributors actively seeking alternatives: Use structured dealer appointment processes to pitch to top-tier distributors.
Get certifications and safety testing: CE, ETL, UL or other applicable certifications reassure dealers and corporate buyers.

How LaCarene Consulting & Services helps manufacturers convert this moment into growth

At LaCarene we help fitness equipment makers identify and secure premium distribution partners in 120+ markets. Right now our services are highly relevant: we map dealer needs, prepare pitch and compliance packages, negotiate dealership terms, and support on boarding and after-sales training. If you are a Canadian, UK, EU or U.S. manufacturer (or a higher-quality Chinese manufacturer repositioning), this is the moment to show why your products deserve distributor shelf space and trust. Dealer Appointment Service

👉 Learn how we can help you grow globally

Conclusion

The end of easy, duty-free low-value imports marks a turning point. It will disrupt some business models built around ultra-low costs and create room for quality, reliability, and home-grown innovation. Fitness equipment manufacturers who can meet quality standards, demonstrate supply reliability, and move quickly with a clear dealer strategy stand to gain. If you want help packaging your offer and connecting with distributors who are looking for alternatives right now, LaCarene Consulting & Services can help you act fast and win lasting partnerships.

Sources

1. U.S. Customs & Border Protection: de minimis national media release / stats (FY2024 de minimis figures). U.S. Customs and Border Protection[1], [2]

2. Reuters News Network: FedEx profit hit and note on de minimis ending (impact on carriers). Reuters [5]

3. FTI Consulting: End of Duty-Free Low-Value Imports: What Companies Must Do (practical guidance). FTI Consulting [7]

4. DLA Piper: CBP proposed rule that would remove Section 321 eligibility for shipments subject to other tariffs. DLA Piper [3]

5. Avalara: guidance on de minimis and the immediate changes for China-origin shipments. Avalara [9]

6. Brookings: analysis on how de minimis became systemically important and impact of changes. Brookings [8]

7. The Guardian / AP: coverage of policy reasons and public reaction to ending de minimis. The Guardian [10]