The sub-$800 direct-ship model is dead, IEEPA tariffs were struck down and replaced within hours, and a December 2026 enforcement deadline is now on the calendar. Here's what changed — and what to do before year-end.
On February 20, 2026, the U.S. Supreme Court ruled in Learning Resources that the International Emergency Economic Powers Act (IEEPA) does not authorize tariffs. Overnight, two layers of duties on Chinese goods vanished: the "reciprocal" tariffs imposed April 2, 2025, and the 20% fentanyl-related surcharge. CBP stopped collecting them on February 24.
If you paid IEEPA tariffs in 2025, talk to your customs broker now about refund claims — duties collected under an unlawful authority don't just disappear into the Treasury.
But don't mistake the ruling for relief. Within hours, the administration imposed a temporary 10% worldwide surcharge under Section 122 of the Trade Act of 1974 (which expired July 24, 2026), and on July 24 new Section 301 tariffs took effect against roughly 60 economies — China pays 12.5% under this measure, stacked on top of the 2018-era Section 301 duties that never went away (25% on Lists 1–3, 7.5% on List 4A). Twenty-five states are suing to block the new 301 layer; duties are being collected while the litigation runs.
Add Section 232 duties — steel and aluminum at 50% since June 2025, plus autos, parts, and copper — and the all-in math for Chinese goods in late 2026 looks roughly like this: around 21% or more for typical consumer goods, about 38% for Lists 1–3 products, 75%+ for steel, and up to 112% for EVs. China remains the highest-tariff major origin by a wide margin.
De minimis ended for China and Hong Kong on May 2, 2025, then globally on August 29, 2025. The 1.36 billion parcels CBP processed under de minimis in FY 2024 now move through formal entry: roughly $4–25 per parcel in broker, bond, and entry fees, plus full tariffs and 2–5 extra days of clearance.
For a $20 accessory, compliance overhead alone can erase the margin. Sellers have three realistic paths: keep shipping direct from China through formal entry, bulk-import into U.S. warehouses or Amazon FBA (paying duty once at bulk entry), or shift origin — but CBP is actively enforcing substantial-transformation rules against origin laundering, so "relabel in a third country" is not a plan.
Tariff rates get the headlines; enforcement gets the money. Three developments should worry every Chinese exporter:
1. Transshipment now carries a 40% penalty with no mitigation. An August 2025 executive order imposes an additional 40% ad valorem duty — on top of the origin-country tariff — on goods CBP determines were transshipped to evade duties. The White House estimates $26 billion a year in lost tariff revenue from transshipment, and CBP is investing heavily in route, classification, and ownership analytics.
2. Customs fraud is being prosecuted like financial fraud. On May 12, 2026, Perfectus Aluminum paid $549.5 million — the largest customs False Claims Act resolution in history — for disguising aluminum extrusions as pallets to dodge antidumping duties. On August 5, Everlight Electronics paid $5.15 million for routing China-made LEDs through Taiwan to dodge Section 301 duties; the whistleblower collected $876,000. Misclassification and undervaluation now carry qui-tam exposure, not just a CBP penalty notice.
3. A December 2026 deadline is ticking. A June 2026 executive order on strengthening customs enforcement eliminates informal entry, restricts continuous bonds, requires beneficial-ownership and provenance disclosures, sets a 50% minimum penalty floor for repeat offenders, and explicitly targets DDP structures, foreign-supplier-as-importer-of-record setups, and nominal U.S. entities. With a 180-day implementation window, full enforcement lands in early December 2026. That is your window to run a compliance review — classification, valuation, origin, and importer-of-record structure.
Separate from tariffs, the Uyghur Forced Labor Prevention Act keeps biting. Through April 2026 of FY 2025, CBP detained 17,651 shipments and denied entry to 10,959, worth $294.76 million — led by electronics, automotive/aerospace, and machinery. On July 31, 2026, DHS added 43 entities to the UFLPA Entity List in the single largest expansion ever, bringing the total to 187, with new focus on aluminum, copper, lithium, PVC, seafood, and cotton. Four new Withhold Release Orders were issued in the first half of 2026 alone. If your supply chain touches any of these sectors, map it now — CBP's 2026 forced-labor guidance rewards importers who operationalize compliance before a detention, not after.