US Ends “De Minimis” Policy for China: IP Challenges and Opportunities

On May 2, 2025, the United States officially terminated the “de minimis” exemption for packages from China (including Hong Kong). This decision has sent significant ripples through global trade and cross-border e-commerce. For intellectual property (IP), this policy shift isn’t just about tariffs and logistics; it’s a critical “stress test” that profoundly impacts IP protection and management, bringing both challenges and new opportunities.

Understanding the “De Minimis” Policy

The “de minimis” rule, rooted in Section 321 of the U.S. Tariff Act of 1930, previously allowed goods valued under $800 to enter the U.S. without tariffs and with simplified customs procedures. Its original intent was to reduce customs’ administrative burden and streamline cross-border shopping. However, amidst escalating Sino-US trade tensions and rising U.S. protectionism, the policy was rescinded, ostensibly to “crack down on the influx of illicit goods and protect domestic industries.”

The immediate consequences of this policy adjustment are substantial: low-value packages from China are now subject to tariffs, and logistics processes will slow due to stricter screening and potential formal customs declarations. This significantly impacts cross-border e-commerce platforms, small and medium-sized sellers, and logistics providers heavily reliant on direct-to-consumer shipping models.

New IP Challenges

Increased Customs Compliance Risks

Previously, minor IP infractions—like irregular trademark use, high design similarity, or unauthorized copyrighted images—might have gone unnoticed due to less stringent customs screening. Now, with increased inspections, these issues are far more likely to be intercepted at customs, leading to goods detention and damage to corporate reputation. IP practitioners must now help clients establish more rigorous internal IP review processes, accurately assess export risks for existing and new products, and expand their services from simple registration applications to comprehensive risk management consulting.

IP Issues Stemming from Business Model Transformation

As businesses pivot to an overseas warehouse model, goods “in inventory” in the U.S. could more easily trigger patent infringements (e.g., method patents, warehousing system-related patents) and trademark use issues that are regionally specific. If localized cooperation or production occurs, complex IP agreements—such as technology licensing, trademark authorization, and trade secret protection—become paramount. When transitioning to a B2B model, the IP guarantees and liability sharing with downstream U.S. importers become central to contract negotiations. This demands higher levels of knowledge and experience from IP professionals, who must provide tailored IP strategic planning and risk management solutions for evolving business models.

Finding Opportunities in Crisis: New Avenues for IP Services

Every crisis presents opportunities. For forward-thinking companies, now is the opportune moment to build a robust IP “moat.”

1.  Customs IP Registration and Protection: Register your brand with U.S. Customs and Border Protection (CBP) to actively intercept infringing products. This shifts from a passive response to an active defense strategy.
2.  Strengthen U.S. IP Portfolio: Don’t just “have” IP; ensure it’s “strong”! High-quality trademark, design patent, invention patent, and copyright registrations are essential “necessities” and “moats” for products entering the U.S. market.
3.  Pre-Risk Screening and Freedom-to-Operate (FTO) Analysis: Conduct thorough IP infringement risk analysis during product design, R&D, and product selection to nip potential issues in the bud.
4.  IP Strategy Consulting for Business Model Transformation: Ensure your business strategy aligns seamlessly with your IP strategy. Professional IP planning is crucial for successful transitions to overseas warehouses, localized collaborations, and B2B models.
5.  Enterprise IP Compliance System Development and Training: Establish and refine internal IP management processes and enhance IP awareness among all employees. Make compliance an integral part of your company’s “immunity.”
6.  Preparation and Response to U.S. IP Litigation: As your company gains more visibility, the likelihood of becoming a litigation target increases. Be prepared by developing response materials and formulating litigation plans in advance to mitigate risks.

Junlong Law Firm: Your IP “Anchor” in the Storm!

The termination of the U.S. “de minimis” policy presents an unprecedented “stress test” for all Chinese companies venturing overseas. This means you need a professional team that truly understands the U.S. market and its complex IP rules to guide you.

Junlong Law Firm is your ideal partner for navigating this IP “stress test”!

Junlong’s Advantages:

1.  Seamless Sino-US Team Collaboration for Cost Reduction: Junlong boasts both Chinese and U.S. licensed attorneys. Our close collaboration significantly reduces your billing costs while providing more forward-looking risk prediction and response strategies.
2.  Full-Spectrum IP Services: From front-end IP risk investigation and freedom-to-operate (FTO) analysis, to high-quality U.S. trademark, patent, and copyright applications and portfolio management, to customs IP recordation, infringement protection, trade secret safeguarding, and even preparation and support for U.S. IP litigation, Junlong’s team offers end-to-end IP solutions covering the entire lifecycle of your international business expansion.
3.  Extensive Practical Experience and STEM Backgrounds: We have a proven track record of successfully handling numerous cross-border IP disputes and complex IP challenges arising from evolving business models. Most of our professionals are legal talents with science, technology, engineering, and mathematics (STEM) backgrounds, enabling us to provide customized and feasible legal services for your diverse needs.
4.  Efficient Communication, Professional Assurance, Tailored Services: Junlong’s front-end business team and back-end case handlers ensure efficient cooperation and comprehensive communication. We are committed to providing a superior legal service experience, keeping you informed of progress and assuring you of our professionalism. Our expertise and teamwork make us an indispensable legal partner in the competitive international market.

Junlong Law Firm is ready to escort your journey overseas! We are eager to work with you to transform crises into opportunities and gain a competitive edge in these new challenges!