Trump just made online shopping more expensive. How that could hurt San Diego’s border economy

U.S. consumers have long enjoyed the ability to buy goods from anywhere in the world and have them delivered to their doorstep without paying an import tax. 

That’s over now.

Late last month, President Donald Trump signed an executive order suspending a century old exemption, known as “de minimis,” which previously allowed for goods under $800 to be brought into the country with no import tax.

Experts say the change will disrupt the cross-border economy between San Diego and Tijuana and provide a significant challenge for companies that built business models on being able to quickly ship goods from warehouses in Tijuana directly to U.S. consumers duty free.

Consumers are already getting hit with higher prices and surprise tariff charges shopping online, and not just for goods by foreign brands. The United Nation’s global postal union reported an 80% drop in postal traffic to the U.S. after Aug. 29, the day the change went into effect, and that 88 countries have suspended deliveries to the U.S, including Germany, Japan and Mexico.

The exemption was suspended because it had become a “pipeline for criminal shipments,” according to a release by U.S. Customs and Border Protection. Last year 98% of narcotics seized by CBP were in de minimis shipments, along with 97% of counterfeit goods, according to official statistics. An earlier release said that de minimis “undercut American manufacturers and cost American jobs.”

Trump used the International Emergency Economic Powers Act and the National Emergencies Act to change the law using an executive order, citing the dangers that fentanyl poses to the Americans. Experts were divided on whether the change would improve security, saying it’s too soon to tell. inewsource will report on any developments.

Mexico’s IMMEX manufacturing and trade program regulations allow goods to be imported into and held in Mexico duty free as long as their ultimate destination is in other markets.

By using IMMEX and the de minimis exemption, businesses were able to import goods to Tijuana and hold them there, taking advantage of the low cost of labor and proximity to the border, then quickly move them directly to U.S. consumers once orders were made, all without paying import taxes.

Now, all imported goods will be subject to the tariffs imposed on the country they are being imported from, disrupting the supply chain for businesses relying on this infrastructure, experts said.

What is the status of trade between the US and Mexico? 

Many goods moving between the U.S. and Mexico enter duty-free under the United States–Mexico–Canada Agreement (USMCA), as long as they meet “rules of origin” requiring products to be mostly made in North America. Cars, clothing and farm goods produced in Mexico typically cross without tariffs, while items that don’t qualify—such as goods assembled in Asia and routed through Mexico—face the regular U.S. tariff schedule. Mexico also runs the IMMEX program, allowing companies to import goods tax-free into Tijuana warehouses for storage or assembly if they are re-exported, but once those goods cross north they are now subject to full U.S. duties following the suspension of the $800 de minimis rule. Trade rules remain unsettled: the U.S. and Mexico are currently in a 90-day negotiation window after Washington delayed planned tariff hikes of up to 30% to allow talks, while existing duties of 25% on cars and 50% on steel, aluminum, and copper remain in place.

“So much of the story around international e-commerce has focused around the Shein and Temus of the world where you’ve got these massive marketplaces that are sending low value products into the U.S. direct from China, but Tijuana is an absolute hub,” said William Jansen, director of customs brokerage at Seko Logistics, an international logistics company that operates extensively in San Diego and Tijuana. “What I think is most interesting about de minimis is that so many consumers were blind to it.”

Jansen said that de minimis orders would show up at a consumer’s door with a domestic label and they would have no idea it was sitting in a warehouse in Tijuana and imported just for them.

Logistics experts declined to share specifics about the companies they work with, but said that many major U.S brands depended on this system to keep prices down.

“They are very large companies. Most of them are in the apparel industry, anything from fast fashion to expensive athleisure that you would see in every mall in America. De minimis is very popular with e-commerce orders,” Mauricio Diaz, president of U.S. customs at the JD Group, a logistics company in the Cali-Baja region, and the Otay Mesa Chamber of Commerce.

Experts say price increases will vary depending on the product, country of origin and materials.

Eduardo Acosta is the international business affairs chair for the San Diego Chamber of Commerce and vice president of RL Jones, a customs brokerage founded in Calexico that operates along the U.S.-Mexico border. He estimates that a $20 purse from China will now cost $34. Other price increases are still hard to estimate but he expects them to go up.

“Everybody says, ‘Oh, this is a Chinese (company) backdooring their products into the U.S.’ Absolutely not. This is U.S. companies that traditionally were making a product 30 years ago in the U.S.,” he said. “These are U.S. companies that are going to pay the duties, which is going to be you, the U.S. consumer.”

Threats to the cross-border economy

Experts also told inewsource they had heard about investments in the region that had been pulled back or put on pause because of the change, but they couldn’t share details about ongoing negotiations.

Acosta said that he believes the industry will continue after a readjustment period, “maybe not as big because we’re talking millions of square feet in Tijuana right now that people will have to downsize,” he said. “The challenge is going to be whether they can get new business, and some of them are already saying that they aren’t getting new contracts.”

Depending on how current negotiations go between Mexico and the Trump administration, many companies may begin to import goods directly into major hubs such as Los Angeles or New York and stop using the Tijuana-San Diego region.

Local business leaders say that could result in jobs lost for San Diegans.

“Companies like JD Group will be severely affected because we will no longer see this cargo moving through our facilities. We employ close to 200 people in San Diego,” Diaz said, adding that they will likely have to cut staff if revenues fall.

While still too soon for exact numbers, Diaz estimates that one in three businesses will be affected in the Otay Mesa region. “Otay Mesa is very industrial. Most of the companies here provide services to importers, exporters, manufacturers and distributors,” Diaz said.

What about cross-border shopping?

As of August 29, 2025, the U.S. suspended the $800 de minimis exemption for shipments, which means packages entering from abroad may now face duties and taxes. This change does not apply to travelers carrying items themselves: you can still bring up to $800 worth of goods per person, once every 30 days, duty-free, and families can pool exemptions. If you go over that amount, regular tariff rates will apply. According to a Customs and Border Patrol Statement, the wait times at ports of entry will not be affected by the change.

The change to the de minimis rule is just one in a string of recent challenging changes for the San Diego economy, said Myriam Mendoza, international business affairs coordinator at the San Diego Chamber of Commerce.

“This just builds up into the already ongoing uncertainty of unstable trade policies to hinder investment and economic growth in our region, especially on small businesses who do not account for resources necessary to navigate the constant change on trade policies,” she said. “They can’t afford to have a broker that can walk them through the entire process.”

Mendoza said consumers can expect higher prices and slower delivery times due to tariffs and the end of the de minimis rule.

On top of the increased duties and tariffs, experts said that the logistics have become much more complicated and difficult for smaller enterprises to manage. 

For example, someone importing a small amount of makeup containers will not only have to navigate customs due to the end of the de minimis rule, but might also need to demonstrate where small components like an aluminum spring came from due to tariffs.

“If you don’t know where the aluminum was smelted and casted and you can’t prove it to customs upon request, they’re gonna assume that it’s Russian aluminum and it’s gonna be subject to 200% duty,” Jansen said, adding that the change will create much more work for customs brokers, of which there are 14,000 in the U.S. “As a customs broker, we are working the longest hours we’ve ever worked, but there’s only so much of us.”