From Facilitation to Fragmentation The Evolution and Reform of Low-Value Import Exemptions in EU and U.S. Law

Abstract

This Article examines the legal architecture, constitutional constraints, and policy rationales underlying low-value import exemptions in the United States and the European Union (EU), with particular attention to their role in cross-border e-commerce. Originally adopted as administrative simplification measures, these so-called de minimis regimes have evolved into strategic tools for tax optimization and regulatory arbitrage. The analysis is anchored in a comparative methodology and draws upon U.S. constitutional doctrine—including the Commerce Clause and the Due Process Clause—international trade law under the General Agreement on Tariffs and Trade (GATT), and the European Union’s harmonized value-added tax (VAT) framework.

In the United States, section 321 of the Tariff Act of 1930 historically allowed duty-free admission for shipments valued at $800 or less, a policy justified by proportionality and administrative efficiency but increasingly criticized for enabling avoidance practices by large e-commerce platforms. In 2025, Congress enacted Public Law 119-21, signed into law on July 4, 2025, repealing the statutory de minimis exemption effective July 1, 2027. Before that repeal could take effect, this regime was suspended by a series of 2025 executive orders (EO) issued under the International Emergency Economic Powers Act (IEEPA), culminating in the suspension of the regime for all countries. In Learning Resources, Inc. v. Trump, the U.S. Supreme Court subsequently held that IEEPA does not authorize the President to impose tariffs, without ruling on the legality of suspending preferential import treatment. The suspension of duty-free de minimis treatment was thereafter continued and revised by a further executive order. In the EU, the customs duty exemption capped at €150 was abolished on July 1, 2026, while VAT is collected from the first euro through mechanisms such as the Import One-Stop Shop (IOSS).

The Article argues that the original legitimacy of de minimis regimes has eroded due to widespread misuse, fragmented enforcement, and the absence of binding international coordination. Drawing on economic literature and official reports from Congressional Research Service (CRS), U.S. Customs and Border Protection (CBP), U.S. Government Accountability Office (GAO), and the European Court of Auditors, it proposes the adoption of a bilateral or multilateral framework establishing common procedural standards, interoperable electronic systems, and minimum thresholds consistent with principles of neutrality, proportionality, and constitutional predictability. Such reforms would align the facilitation of trade with the equitable and effective collection of public revenues.