DDP or DDU When Shipping From China to U.S. Shopify Customers After De Minimis

With the $800 de minimis exemption gone, parcels shipped straight from China to U.S. Shopify customers clear customs and pay duty. Under DDU the customer pays duty at delivery; under DDP you or your forwarder pay first and the price includes it. The real choice is who acts as importer of record (IOR): duty, customs liability and any duty refund follow the importer. With DDP, duty is your cost and needs paperwork to reach cost of goods sold; with DDU there's no duty on your books, but refusals, bad reviews and chargebacks go up.

Where de minimis stands now

The $800 de minimis exemption ended for goods from mainland China and Hong Kong on May 2, 2025, and was suspended for all countries on August 29, 2025. The One, Big, Beautiful Bill, signed July 4, 2025, repeals its legal basis from July 1, 2027. On June 24, 2026, CBP published rules in the Federal Register writing the suspension into its regulations, with a new informal entry process for mail parcels taking effect July 24, 2026. So whether by courier or post, each parcel from China now goes through entry and pays duty.

The duties themselves keep moving. The IEEPA tariffs were stopped by the Supreme Court on February 20, 2026, and importers of record can claim refunds through CBP; Section 301 tariffs on Chinese-origin goods remain. Look up rates by tariff code and origin and follow the latest CBP and USTR notices. The full timeline is in our Amazon FBA guide.

What DDU and DDP mean

DDU (delivered duty unpaid, now usually called DAP): you ship to the customer's door and the customer pays duty and import charges on delivery. The customer is generally the importer, and the carrier collects the duty, often with a handling fee.

DDP (delivered duty paid): you bear everything to the customer's door, duty included. In practice that means either a forwarder's "duty-included" service, where the forwarder or its designee is importer, or your own U.S. company, or your Chinese company as a nonresident importer, acting as importer.

Four ways to do it

DDU: no duty on your books and a lower-looking price. But customers hit with tens of dollars in duty and fees at the door refuse parcels, leave bad reviews, ask for refunds and file chargebacks. Return or disposal freight on refused parcels is yours.

DDP through a forwarder: a good customer experience, and you pay the forwarder's duty-included rate. The catch is that duty sits in the forwarder's name, you don't see entry details, and only the forwarder can claim refunds. Your contract should say who sets customs values and tariff codes and who is liable when something goes wrong.

DDP with your U.S. company as importer: duty and entries are in your name, costs are clear and you can claim refunds yourself. You register importer details with CBP and use a customs broker; formal entries (generally goods over $2,500) need a customs bond. A foreign company can also be a nonresident importer of record, again with a bond and a U.S. agent for service of process.

Bulk into a U.S. warehouse, then ship: one entry and one duty payment per shipment, lower duty and freight per unit, and the fastest delivery. The price is physical presence in the warehouse state, with that state's sales tax and possibly income or franchise tax; and for a foreign-owned single-member LLC, U.S. inventory generally means a U.S. trade or business, so the owner may need to file Form 1040-NR.

Booking the duty

DDP: duty, brokerage and inbound freight are part of what the goods cost. For bulk imports they go into inventory and are deducted as cost of goods sold when the goods sell, not all in the year paid; for single parcels shipped direct, book them with the order as cost of goods sold or fulfillment cost. Keep the entry summaries, or forwarder invoices itemized by shipment.

Charging customers duty separately: if your Shopify checkout charges "duties and import taxes" as a separate line, that money is revenue and shows up in the 1099-K gross amount, while the duty you pay is a cost. Book both.

IEEPA refunds: only the importer of record or its broker can file through CBP. A refund for goods already sold is generally booked in the year received; for goods still in inventory it reduces inventory cost. With a forwarder's DDP service, you can only settle with the forwarder under your contract.

DDU refunds and chargebacks: refunds for refused parcels reduce revenue, and lost freight is an expense; chargebacks carry a fee, $15 per U.S. chargeback on Shopify Payments.

How this connects to sales tax and income tax

Duty and sales tax are separate. Duty is paid to CBP at import; sales tax is collected from customers under state law. DDP doesn't take care of sales tax: on a Shopify store, deciding nexus, registering, collecting and filing are yours. Sellers shipping direct from China with no U.S. inventory still face state economic nexus thresholds (more than $100,000 a year in most states); sellers using a U.S. warehouse have nexus in that state from the first sale.

On income tax, a foreign company shipping only from China with no U.S. office, people or inventory needs a facts-and-circumstances review, including the U.S.–China treaty, to decide whether it has a U.S. business. A U.S. company that imports and holds goods in a U.S. warehouse files under its own entity type, and a foreign-owned company files Form 5472 every year.

An example

Example (hypothetical numbers, to show the method): a Chinese company sells a $60 Bluetooth speaker on Shopify, costing $12, mailed directly from Shenzhen. Under DDU, customers are asked for duty and carrier fees at delivery, say $15 in total; out of 1,000 orders a month, 60 are refused at $8 return freight each, a $480 loss, and 20 turn into chargebacks costing $300 in fees. Switching to a forwarder's DDP service adds $6 per order, $6,000 a month, but refusals and chargebacks drop sharply, and raising the price from $60 to $64 covers part of it. Which wins depends on your own refusal rate, conversion and duty numbers; either way, get paperwork you can book.

Four questions before you choose

Who should be importer, and do you want entries in your name? Can you get duty records by order or by shipment? How much refusal risk and customer friction can you take? Should goods go into a U.S. warehouse first, and which states would that give you nexus in? Answer those and DDP vs. DDU usually decides itself.

Next steps

For Shopify fees, payments, sales tax, entity choice and foreign-owned LLC filings, see our guide to selling on your own Shopify store. To work through duty cost, importer of record and state tax for your shipping plan, book a free 15-minute call or message WeChat YCLUSA. YCL CPA handles the tax and bookkeeping side; tariff classification, customs entries and product certification belong with your customs broker and testing labs.

General tax information, last checked November 9, 2026. Duty rates and import rules follow CBP and USTR notices at the time.