International shipping has never been simple, but recent changes are bringing even more challenges—especially for businesses shipping from China and Hong Kong to the U.S. One of the biggest changes is the end of Entry Type 86 (T86), a customs clearance method that previously allowed small parcels to enter the U.S. without duties or taxes. As this exemption officially ends on May 2, 2025, cross-border sellers must adapt quickly to new, more complex customs regulations. Let’s break down what this means—and what you can do to stay competitive.
What Was T86 Customs Clearance?
Entry Type 86 was a streamlined customs process under the U.S. de minimis rule, which allowed shipments valued under $800 to enter duty-free and tax-free. It was designed for low-value e-commerce parcels and required only electronic filing with basic shipment information such as item descriptions, consignee, and value. This made T86 a popular and efficient choice for online sellers shipping from China and Hong Kong.
Understanding the De Minimis Rule
“De minimis” refers to the threshold below which shipments are exempt from duties and taxes. In the U.S., this threshold is $800 per shipment per day. T86 clearance leveraged this rule to simplify entry procedures for small parcels, offering a huge cost advantage to cross-border sellers and platforms.
Why Is Entry Type 86 Ending?
Starting May 2, 2025, Entry Type 86 will no longer apply to goods originating from China and Hong Kong. Under the updated U.S. customs policy:
- All shipments—regardless of value—will require full customs entry procedures.
- Duties and taxes will apply, even on shipments under $800.
- A 120% tariff or a flat fee of $100 per item will be charged, with increases up to $150 per item from June 1, 2025.
This marks a significant shift, particularly affecting small businesses, dropshippers, and budget e-commerce platforms. Popular platforms like Temu and Shein have already begun adjusting their pricing to reflect these additional costs.
What Comes After T86? T11 and T01 Customs Clearance
With T86 no longer available, importers must now use standard customs clearance methods:
✅ T11 Customs Clearance (Informal Entry)
- For shipments valued under $2,500 (some limited to $250).
- Requires documentation (e.g., commercial invoice, HTS code).
- Import duties apply based on product category and origin.
- Customs entry fee (MPF): $2.62 per entry.
✅ T01 Customs Clearance (Formal Entry)
- For shipments over $2,500 or for regulated goods.
- Requires extensive documentation, customs bond, and a licensed broker.
- MPF: 0.3464% of value, minimum $32.71, maximum $634.62.
| Comparison | Before (T86) | After (T11 Informal) | After (T01 Formal) |
|---|---|---|---|
| Package Value | ≤ $800 | ≤ $2,500 (some items ≤ $250) | No limit |
| Declared Value Basis | Transaction Value | FOB Value | FOB Value |
| Import Duties | None | Tariffs + Section Duties | Same as T11 |
| Customs Charges | None | $2.62/entry (MPF) | 0.3464% of value (min $32.71) |
| Inspection Risk | Minimal | Based on entry, inspections possible | Higher risk + broker required |
Practical Solutions for Chinese and Hong Kong Sellers After May 2, 2025
1. Switch to T11 or T01 Clearance
This is currently the most reliable method. Though it involves higher costs, it ensures compliance and shipment continuity. Many logistics providers now offer prepaid tax models, where tariffs (often ~165% of FOB) are included in pricing. Alternatively, DDP (Delivered Duty Paid) models also include tax and duty in the shipping fees.
⚠️ Important: Always declare goods at accurate value. Under-declaring to avoid tariffs can lead to inspections, fines, or confiscation.
2. Explore Other International Markets
Instead of focusing solely on the U.S., consider exporting to markets with more favorable de minimis policies such as:
- Southeast Asia
- Europe
- Middle East
- South America
- Canada
These regions may offer more lenient duty exemptions, allowing you to stay competitive globally.
3. Transshipment Through a Third Country (Use Caution)
Some sellers may consider routing goods through countries like Vietnam, Taiwan, or South Korea before shipping to the U.S. This approach, known as transshipment, can potentially reclassify the country of origin and qualify for de minimis exemption.
However, this method is risky:
- You must relabel and repackage goods.
- Provide new country-of-origin documentation.
- Ensure compliance with U.S. import regulations.
If not done properly, this strategy could lead to customs violations and shipment delays.
4. Bulk Import to the U.S. + Domestic Fulfillment
A long-term strategy is to import in bulk and use U.S.-based fulfillment centers. Though duties still apply, you can:
- Reduce per-unit shipping costs
- Avoid parcel-by-parcel customs delays
- Offer 2–3 day delivery to U.S. customers
This model is particularly effective for scaling operations and improving customer satisfaction.
5. Use Smart Fulfillment Services like Fyllhub
Fyllhub offers optimized shipping solutions from China to the U.S. using T11 and T01 clearance. They handle:
- Customs filing
- Tariff calculations
- DDP logistics
By using services like this, you reduce risk, stay compliant, and keep your costs under control—helping you stay competitive in the evolving trade landscape.
Conclusion
The end of Entry Type 86 marks a turning point for cross-border sellers in China and Hong Kong. Starting May 2, 2025, all shipments to the U.S. will be subject to duties—even those under $800. This increases costs and complexity, especially for smaller businesses. However, by adapting to T11/T01 clearance, exploring new markets, and partnering with logistics providers like Fyllhub, sellers can still thrive under the new rules.
Now’s the time to review your logistics strategy, adjust your pricing, and plan ahead—so your business isn’t left behind.
