Just in case you live under a rock: for years, global ecommerce giants like Temu, Shein, and countless dropshippers thrived on a U.S. trade exemption called De Minimis. The rule let shipments under $800 enter the country duty-free, avoiding customs delays and costs.
It was meant to simplify low-value imports for consumers, but it became the backbone of ultra-cheap, high-volume ecommerce. That’s why the Trump administration is shutting it down in 2025: lawmakers argue the exemption was being abused, undercutting domestic retailers, weakening tax revenues, and creating compliance headaches at scale.
(More realistically, it’s a shot across the bow at the Chinese economy. Together Temu and Shein likely bring in more than $50 billion in annual revenue, driven by low-cost Chinese manufacturing.)
The end of de minimis means the days of ultra-cheap dropshipping hacking are over. Same with super-cheap knockoff products shipped via viral international dupe factories.
Most people are yapping about China and supply chains. But I think the real impact of the end of de minimis is going to happen in the digital ad market.
Without the exemption, their model comes under pressure:
Higher landed costs → duties push up retail prices.
Customs clearance delays → slower shipping times erode “fast + cheap” value props.
SKU sprawl reduced → millions of micro-listings become harder to sustain when compliance is required.
These companies were spending billions per year on growth marketing. It wouldn’t surprise me if Temu was the highest-spending ad account on Meta in the world. A forced retreat in logistics will cascade directly into how they spend: less efficient ROAS, higher CAC, more cautious auction bids.
This makes me think performance is going to change for everybody else.
What this means for advertisers
Here’s the tactical read for media buyers:
Auction relief, at least temporarily. If Temu and Shein (and all the others affected by de minimis) pull back even slightly, CPMs may soften, especially on TikTok and Meta, where they’ve dominated auctions in women’s fashion, beauty, gadgets, and home goods. We’ll see if auctions respond, you’ll hear it here first.
ROAS recalibration across the board. Lower conversion rates for ultra-cheap products mean duty-compliant advertisers must rethink offers. Expect CAC to rise for low-ticket goods, while mid/high-AOV brands see steadier performance.
Creative messaging shifts. Duty-free shipping can no longer be assumed. Brands emphasizing “Ships from the U.S.”, “Fast, tracked delivery”, and “No surprise customs fees” will stand out and capture abandoned Temu/Shein/dropshipping buyers. Why not ride the pseudo-patriotic wave here?
Fewer SKU-driven ads. Many importers will shrink product variety, slowing down rapid-fire creative testing. Expect a swing toward evergreen creative, value-driven angles, and brand storytelling to compensate. They can’t just throw everything at the wall and see what sticks, as the margins on micro-campaigns and micro-products are dried up.
Platform compliance pressure. Ad platforms may tighten scrutiny on sellers who hide duties or create poor post-purchase experiences. Not to mention an auction bias toward ads linked to in-app purchases, such as on TikTok Shops and Meta Shops, which some have suspected but haven’t yet confirmed.
Opportunities for ecommerce operators
This shake-up creates openings if you’re ready to act:
Double down on U.S. fulfillment messaging. Highlight it everywhere: ad copy, product pages, checkout. Trust and speed become conversion boosters. People might wrongfully think that everything “comes from China” and hold back from purchasing because they don’t understand that while your widget was made in China, it’s already sitting in a warehouse in New Jersey ready to ship.
Reframe value propositions. Compete on durability, transparency, and customer experience rather than bottom-barrel pricing. The “cheap” stuff will no longer be cheap anymore. Give consumers something else to latch on to: if it can’t be cheap, it can at least be good value.
Lean into brand. Cheap viral SKUs are harder to sustain. This is a chance to stand out with consistent storytelling and differentiated positioning. While you might have been smoked on price by sketchy sellers, they’re gonna fall out of the mix and you’ll be competing with Amazon instead.
Target new customer segments. With CPMs temporarily easing, now is the time to invest in mid- and upper-funnel campaigns to grow share of voice. This is something the people at Northbeam recommend year-round, but in the short term, it might be cheaper now than it’s been in years. How are your CPMs looking?
What to do right now
Watch your benchmarks. Your CAC and ROAS targets are about to shift. Don’t assume last year’s numbers still apply.
Double down on measurement. In a volatile ad auction environment, knowing what’s truly driving incremental revenue is everything. Don’t settle for platform-reported numbers.
Book a Northbeam demo: best time to do this was six months ago, second best time is right now.
From our network:
For most advertisers, ROAS is the north star. It’s the number that gets shared in boardrooms, the metric that determines whether a campaign is celebrated or cut.
But after years of working with brands that spend millions each month on paid social, I can tell you: ROAS alone doesn’t tell the whole story. In fact, it can often hide the very signals that determine whether your advertising is growing the business or just chasing its own tail.
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