Updated August 25th, 2025
Put simply, Section 321 of the U.S. Tariff Act allows low-value shipments to enter the U.S. without paying duties or taxes. Originally enacted in 1938, it’s become a game-changer for eCommerce businesses seeking to minimize costs on international shipments. However, Section 321 also comes with its complexities and sparked ongoing debates regarding its use, especially in eCommerce. Significant changes in 2025, including the removal of the exemption for imports from China and Hong Kong effective May 2, 2025, and the full repeal for commercial imports effective July 1, 2027, under the “One Big Beautiful Bill Act” signed on July 5, 2025, are reshaping its application. This cheat-sheet of sorts will provide a comprehensive understanding of Section 321 by defining key terms, concepts, and policy issues associated with this provision.
2025 Operational Update: Section 321 After August 29
Effective 12:01 a.m. EDT on August 29, 2025, duty-free de minimis treatment under Section 321 is suspended for all non-postal shipments worldwide. Every low-value commercial parcel now needs a real customs entry in ACE and will incur applicable duties, taxes, and fees. CBP can require a basic importation bond even for informal entries at or below $2,500.
Postal parcels are not duty-free. Carriers must collect duty using one method at a time:
• Ad valorem equal to the “effective IEEPA tariff rate” for the origin country, or
• A temporary specific duty per parcel for 6 months: $80 if the origin’s IEEPA rate is under 16%, $160 if 16–25%, $200 if above 25%. After 6 months, postal must use ad valorem only. Country of origin must be declared.
Country scope and prior actions
China and Hong Kong duty-free 321 was already shut on April 2, 2025. The July 30, 2025 order activates suspensions tied to Canada and Mexico and adds a global suspension linked to the reciprocal-tariff emergency. Each determination stands on its own.
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Table of Contents
- 1. Central Definitions Related to Section 321
- 2. How Section 321 Works for eCommerce Businesses
- 3. The Section 321 Data Pilot and Entry Type 86 Test
- 4. Benefits of Section 321 for eCommerce Businesses
- 5. Restrictions and Limitations of Section 321
- 6. Policy Issues and Debates Surrounding Section 321
- 7. FAQs About Section 321
- 8. Section 321 Glossary: Terms You Need to Know
- Summary
1. Central Definitions Related to Section 321
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Section 321: A U.S. Customs and Border Protection (CBP) shipment type that allows goods valued under $800 to be imported into the U.S. duty-free. It applies to low-value imports and reduces both the financial and administrative burden of formal customs clearance. Note that as of 2025, this exemption has been restricted for certain origins (e.g., China and Hong Kong), with a full repeal for commercial imports scheduled for July 1, 2027.
De Minimis Value: The threshold for low-value shipments that can enter the U.S. without paying duties or taxes. As of 2016, the de minimis value is $800. Goods under this threshold can enter duty-free, with simplified paperwork, though restrictions and the upcoming 2027 repeal limit its long-term applicability.
Customs Duties: Taxes imposed on imported goods. Section 321 provides an exemption for low-value shipments that meet the de minimis threshold, meaning no duties need to be paid, but this is subject to recent changes and will end for commercial use in 2027.
Entry Type 86: An electronic submission method used by CBP to process informal, low-value entries. This system speeds up customs clearance for shipments that qualify under Section 321, requiring fewer data fields and less documentation, though evolving policies may affect its use.
Consignee Information: Details about the recipient of the shipment. Under Section 321, the consignee’s name and address must be provided for customs clearance, along with the shipper’s information.
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2. How Section 321 Works for eCommerce Businesses
Duty-Free Importing
Section 321 allows businesses to import products valued under $800 into the U.S. without paying duties or taxes. This can significantly reduce logistics costs, making it more feasible for eCommerce businesses to source products overseas.
Faster Customs Clearance
Shipments that qualify under Section 321 can clear customs faster, with minimal paperwork. Using systems like Entry Type 86 allows businesses to electronically file necessary documents, further speeding up the process.
Daily Limit
A restriction under Section 321 is the one-shipment-per-day rule. Each individual or business can only import one duty-free shipment under Section 321 per day. Violations, such as breaking shipments into smaller parcels to exploit this benefit, can result in fines and penalties.
3. The Section 321 Data Pilot and Entry Type 86 Test
Section 321 Data Pilot
To manage the growing number of de minimis shipments, the CBP introduced the Section 321 Data Pilot in 2019. This program allows online marketplaces, freight forwarders, and carriers to submit electronic shipment data in advance. The goal is to streamline the inspection of high-risk shipments while facilitating faster customs clearance for low-risk goods.
Entry Type 86 Test
The Entry Type 86 Test was introduced to enable customs brokers and self-filers to electronically declare low-value entries, making it easier to comply with the rules of Section 321. The system requires fewer data fields compared to formal entries, speeding up the customs clearance process.
4. Benefits of Section 321 for eCommerce Businesses
Lower Costs – Section 321 provides substantial cost savings by allowing goods to be imported duty-free as long as they meet the de minimis threshold. This is especially beneficial for businesses that manufacture products overseas in countries like China, where shipping costs can be high.
Faster Shipping – Because Section 321 allows for faster customs clearance, businesses can ensure that products reach U.S. customers more quickly. Fewer delays at customs mean a smoother overall shipping process, which enhances customer satisfaction.
Competitive Edge – By using Section 321 to minimize shipping costs and expedite delivery, eCommerce businesses can offer more competitive pricing and faster shipping options. This helps to attract more U.S.-based customers while keeping operational costs low.
5. Restrictions and Limitations of Section 321
Daily Shipment Limit – Under Section 321, businesses and individuals are limited to one shipment per day. Any attempt to split a large shipment into multiple smaller ones to bypass this rule can lead to penalties.
Restricted Goods – Not all goods qualify for the duty-free exemption. Products like alcohol, tobacco, goods requiring inspection (e.g., hazardous materials), and those subject to antidumping or countervailing duties are not covered under Section 321. Goods regulated by agencies like the FDA, USDA, and CPSC also face additional scrutiny. As of May 2, 2025, the exemption does not apply to imports from China or Hong Kong. Starting August 4, 2025, civil penalties apply for violations when attempting to use de minimis entry ($5,000 for first offense, up to $10,000 for subsequent). The full commercial repeal takes effect July 1, 2027, with exemptions remaining only for travel purchases and bona fide gifts.
6. Policy Issues and Debates Surrounding Section 321
The rise in de minimis imports has sparked debates about whether the current $800 threshold is too high and whether foreign companies are using it to circumvent duties. Critics argue that foreign businesses, particularly those in China, are taking advantage of the exemption to avoid U.S. tariffs and compete unfairly with U.S. companies. In 2025, these concerns led to significant actions: the White House removed the exemption for imports from China and Hong Kong effective May 2, 2025 (addressing the 76% of 2024 fiscal year shipments from China), followed by President Trump signing the “One Big Beautiful Bill Act” on July 5, 2025, which repeals the commercial de minimis exemption entirely effective July 1, 2027.
Some policy makers have suggested lowering the de minimis threshold back to $200 or imposing stricter regulations on products from countries like China and Russia. Others have called for increased documentation requirements to ensure compliance with U.S. laws.
Proposed Changes
Lowering the threshold: Reducing the de minimis value to $200 would bring the U.S. closer in line with other countries’ import thresholds.
Increased Documentation: Requiring more detailed documentation for de minimis shipments could help reduce fraud and ensure compliance.
Country-Specific Restrictions: Imposing restrictions on goods from specific countries like China would prevent foreign companies from abusing the system.
These proposals have partially materialized with the 2025 changes, prompting e-commerce companies like Shein and Temu to consider shifts to bulk shipping or expanded U.S. fulfillment operations.
7. FAQs About Section 321
What is the daily limit for Section 321?
The daily limit is one shipment per person, per day. This means a single importer can only claim one duty-free shipment under Section 321 each day.
Does Section 321 apply to goods from China?
No, as of May 2, 2025, goods from China or Hong Kong no longer qualify for the Section 321 exemption. Previously, shipments under $800 were exempt from Section 301 tariffs, but this has been eliminated to address trade and security concerns.
What is the difference between Section 321 and Entry Type 86?
Section 321 refers to the legal framework that allows duty-free imports under $800. Entry Type 86 is a CBP test program that enables businesses to electronically file these entries with fewer data requirements, simplifying the customs clearance process.
8. Section 321 Glossary: Terms You Need to Know
Section 321: A provision of the U.S. Tariff Act (19 USC §1321) that allows for duty-free imports of goods valued at $800 or less per shipment, per day. It simplifies customs clearance for low-value shipments, though restricted for China/Hong Kong origins since May 2, 2025, and set for commercial repeal on July 1, 2027.
De Minimis Value: The maximum value ($800) for goods that can enter the U.S. duty-free under Section 321. This value is based on the shipment’s retail value in the country of origin, not its U.S. retail price, with the exemption ending for commercial use in 2027.
Entry Type 86: A U.S. Customs and Border Protection (CBP) program allowing for the electronic submission of Section 321 shipments. It simplifies the customs process by requiring fewer data fields than formal entries.
Consignee: The recipient of a shipment. Section 321 shipments must include the consignee’s name and address, as well as details about the shipper and the contents of the package.
Customs Duties: Taxes imposed on imports. Section 321 provides an exemption from these duties for low-value shipments under $800, subject to recent restrictions and the 2027 repeal.
Automated Broker Interface (ABI): A system that allows customs brokers and self-filers to electronically transmit import data to CBP for the processing of shipments, including those under Section 321.
Section 321 Data Pilot: A CBP initiative that enables eCommerce marketplaces, carriers, and other logistics providers to submit electronic shipment data in advance, allowing for faster and more efficient customs clearance of de minimis shipments.
Partner Government Agencies (PGAs): U.S. government agencies like the FDA, USDA, and CPSC that regulate certain goods imported into the U.S. Some of these products may still be subject to inspection or regulation even if they qualify for the de minimis exemption under Section 321.
Consolidated Shipments: Multiple shipments grouped together for transport. Under Section 321, shipments must be individually addressed to different consignees to qualify for duty-free entry. Grouped or consolidated shipments addressed to one consignee are treated as a single importation and do not qualify for Section 321 exemptions.
Country of Origin: The country where the product was manufactured or produced. For Section 321, the de minimis threshold is calculated based on the retail value of the goods in their country of origin, with exemptions now barred for China and Hong Kong.
301 Tariffs: U.S. tariffs imposed on goods from specific countries, such as China, under Section 301 of the Trade Act of 1974. Section 321 shipments were previously exempt from these tariffs if they met the de minimis threshold, but this no longer applies to China/Hong Kong origins.
Manifest: A document listing the details of a shipment, including the contents, value, and consignee information. For Section 321 shipments, the manifest must be provided to U.S. Customs and Border Protection (CBP) for clearance, particularly when submitting data electronically through programs like Entry Type 86.
Harmonized Tariff Schedule (HTS): A system used by CBP to classify imported goods for duty assessment. While Section 321 shipments are exempt from duties, HTS codes are still used to identify the nature of the goods being imported, especially for reporting and compliance purposes.
Consolidator: A logistics service provider that combines smaller shipments into one larger shipment for more efficient transport. While beneficial for shipping, Section 321 does not apply to consolidated shipments unless each shipment is individually addressed to different consignees.
De Minimis Pilot Program: A U.S. government initiative to test new methods of processing low-value shipments under the de minimis rule. This program allows businesses to submit detailed shipment data electronically ahead of time, helping CBP manage the large volume of imports.
Antidumping and Countervailing Duties (AD/CVD): Special tariffs imposed on goods that are imported below market value (dumping) or that have been subsidized by foreign governments. Goods subject to AD/CVD are not eligible for duty-free entry under Section 321, even if their value is below $800.
