DDP vs DDU Dropshipping From China in 2026: Who Pays Customs Now That De Minimis Is Gone

Last reviewed: 2026-10-13. US customs and tariff rules change often. The rates and dates below were checked against CBP, USTR, USITC (HTS), CPSC and Shopify sources on that date. This guide is general information, not legal or customs advice. Confirm your own classification and duty rates with a licensed customs broker before you set prices.

DDP shipping from China (Delivered Duty Paid) means the seller, or a logistics provider working for the seller, pays US import duties and handles customs clearance, so the customer pays nothing on delivery. In 2026 this decision matters on every order: the US has suspended duty-free de minimis treatment for low-value parcels from all countries, so even a $20 order from China now owes duty.

Key takeaways

• De minimis is suspended. Parcels valued at $800 or less no longer enter duty-free, whatever their origin or transport mode. CBP wrote the suspension into its regulations through two interim final rules published on June 24, 2026.
• The duty is the same under DDP and DDU. The two terms only decide who pays it and when. Under DDP you pay before delivery. Under DDU (now called DAP in Incoterms®) your customer pays, often with a carrier fee on top.
• China-origin goods now carry a new 12.5% Section 301 duty (HTS 9903.05.31, in force since July 24, 2026). It is added to the normal duty rate and to any older China Section 301 duty (Lists 1–4A) that also applies.
• Check your HTS code before you copy someone else's math. Many silicone kitchen utensils fall under HTS 3924.10.40, which is not on Section 301 List 3. As of 2026-10-13 they pay 3.4% + 12.5% = 15.9%, not 40.9%.
• CPSC eFiling now covers mail. Certificate data for regulated consumer products has had to be eFiled for most imports since July 8, 2026. From October 22, 2026 the same applies to international mail shipments entered under Entry Type 13.
• Our default advice: use DDP for consumer orders, and price the duty into the product. Move proven sellers into bulk imports once the numbers support it.

What changed? The $800 de minimis exemption is suspended

Almost every commercial parcel from China to the US now owes duty, however cheap it is. Here is how it happened:

• May 2, 2025: duty-free de minimis treatment ended for products of China and Hong Kong under Executive Order 14256 (see CBP's Federal Register notice implementing EO 14256).
• August 29, 2025: the suspension was extended to all countries (CBP news release, June 24, 2026).
• February 20, 2026: the Supreme Court held in Learning Resources, Inc. v. Trump that IEEPA does not authorize tariffs. The de minimis suspension continued anyway under Executive Order 14388.
• June 24, 2026: CBP published two interim final rules. One covers every mode except the international postal network and took effect that day. The other covers international mail and creates a new postal informal entry process, which took effect July 24, 2026.

Bona fide gifts (generally up to $100) and personal articles carried by travelers are still exempt. Goods "given" as part of a purchase do not count as gifts, so you cannot mark a customer's order as a gift (CBP e-commerce FAQs).

Courier and private-line parcels vs. international mail

Each parcel still needs an entry, but the route it takes decides which process applies:

• Courier, express and private-line shipments (non-postal): "release from manifest" and the Entry Type 86 test are gone. Low-value shipments now move mainly on an informal entry (Entry Type 11), or on a formal entry above $2,500 or where formal entry is otherwise required. Every applicable duty, tax and fee is due.
• International mail ($2,500 or less): the new postal informal entry needs a filer with the right to make entry (the owner, the purchaser, or a licensed customs broker they designate) and a customs bond. The filer submits monthly data, including 10-digit HTS codes and the UPU tracking number, and pays duty through Pay.gov by the 7th of the following month.
• From October 22, 2026: goods subject to Chapter 99 duties (such as Section 301), goods subject to partner-agency requirements (such as CPSC certificates), and goods claiming Chapter 98 or free-trade-agreement treatment can no longer use the manual postal informal process. They must use Entry Type 13 (CBP's electronic mail entry test) or a formal entry. Because the new 12.5% duty applies to most China-origin goods, this probably affects most China-to-US mail parcels. Confirm with your broker (CBP mail informal entry FAQs).

DDP vs DDU (DAP): who pays duty, who clears customs, and who is the importer of record?

Under DDP, the seller's side pays the duty and clears US customs before delivery. Under DDU/DAP, the goods arrive with duty unpaid, and the buyer (or the buyer's carrier or broker) clears them and pays.

A note on terms. DDP is an official ICC Incoterms® 2020 rule. DDU is not: the ICC dropped it in Incoterms® 2010 and replaced it with DAP (Delivered at Place) (ICC introduction to Incoterms® 2010; ICC Incoterms® 2020). Incoterms are contract terms between a seller and a buyer. In parcel shipping, "DDP" and "DDU" are also used loosely as carrier service labels, so ask your shipping line exactly what its "DDP" covers.

The duty owed is set by the product's classification, its origin and its dutiable value. It is the same whichever term you use. DDP moves that cost from a surprise at your customer's door to a line in your pricing.

Is DDP or DDU better for dropshipping from China?

For most consumer dropshipping from China to the US, DDP is the better choice. Customers expect one price, and surprise bills at the door lead to refused parcels and disputes. DDU/DAP still makes sense in a few B2B situations. The right setup depends on your product and channel:

• Low-value impulse products (roughly under $30): use DDP. A duty-and-fee bill on a cheap item is the most likely trigger for a refusal. Duty on these orders can take a large share of the price, so run the landed-cost math below before you launch.
• Higher-value products ($100+): still use DDP for consumers, but every classification error costs more. Get your HTS codes checked by a broker. Shipments over $2,500 need a formal entry.
• Testing new products: use per-order DDP from China. You pay more duty per unit, but you hold no inventory.
• Scaling proven sellers: compare per-order DDP with a bulk import into a US warehouse or Amazon FBA. In a bulk import, the duty base is usually your purchase price, not the retail price. See the worked example for when bulk import is cheaper and when it is not.
• Shopify (US store selling to US customers): build the duty into your product price. Shopify Managed Markets covers international selling and will not calculate US import duty on goods you ship in from China (see the Shopify section below).
• TikTok Shop: price all-in from the start and leave room for platform discounts. Check TikTok Shop's current seller and logistics policies for your account type before you choose a shipping setup.
• Crowdfunding (Kickstarter, Indiegogo): include US duties in the pledge price, or plan one bulk import to a US fulfillment center. Backers react badly to delivery-day bills, and you cannot reprice pledges after the campaign.
• B2B or wholesale buyers with their own broker: DAP can work. The buyer acts as importer and controls classification and clearance.

What does DDU really cost in Q4?

DDU can look cheaper because no duty appears in your costs. The bill hasn't gone away; your customer just gets it later. Picture a gift buyer who paid $29.99 and is then asked for duty plus a carrier handling fee before release (an illustration, not a quote). Refusals and disputes follow a predictable pattern:

1. Return or disposal costs. The parcel is refused or abandoned, and you have already paid for outbound shipping.
2. A refund anyway. The customer says they never received the order.
3. Chargebacks. Disputes cost fees, and a rising dispute rate can put your payment account at risk.
4. Reviews. Complaints about "hidden customs fees" keep costing you sales after the holidays.

To size the risk, take your own refusal rate (or an estimate) and multiply it by product cost plus outbound shipping plus dispute fees. Then compare the result with the duty you would have priced in under DDP. For example, if 5% of 2,000 holiday orders were refused, that would mean 100 lost products and 100 wasted shipments (a hypothetical rate, not Fulfillman data).

How do you work out landed cost per unit?

Your landed cost per unit is everything you pay to get one item to your customer with duties paid:

Landed cost = product cost + packaging/QC + international shipping + MFN duty + any Section 301 duties + customs fees (such as MPF) + broker/clearance fees

What value is duty charged on? Direct-to-consumer vs. bulk import

US duty is usually charged on the transaction value: the price actually paid or payable for the goods when they are sold for export to the United States, plus certain additions. International freight and insurance are excluded when they are separately identified (19 U.S.C. § 1401a). How that works out depends on your model:

• Direct-to-consumer parcels: the sale for export is usually your sale to the US customer. The starting point is therefore normally what the customer pays for the goods, not your supplier price. Separately stated shipping charges may be excluded. Discounts, bundles and free-shipping pricing all change the calculation, so agree on a consistent method with your broker or shipping line.
• Earlier ("first sale") prices: where there is a chain of sales, an importer can sometimes use an earlier sale, such as factory to middleman. To do so, it must prove that sale was a bona fide, arm's-length sale and that the goods were clearly destined for the US at that point. CBP starts from the last sale, the evidence required is heavy, and per-order dropshipping rarely fits neatly. Get professional advice before relying on it.
• Bulk imports to a US warehouse or FBA: the sale for export is usually your purchase from the supplier, so the duty base is typically the factory price plus any required additions (for example certain packing costs, assists or royalties). The base is often much lower, but bulk import is not automatically cheaper. You take on freight, a customs bond, broker fees, formal entry fees above $2,500, warehousing and inventory risk, and the same tariff rates still apply. Related-party sales need a price CBP will accept.

Never declare a value you can't support. Material false statements or omissions on an entry can lead to penalties under 19 U.S.C. § 1592. Penalties scale with culpability (negligence, gross negligence or fraud), and goods can also be delayed or seized. Choosing the import structure that legitimately gives the right value is fine. Under-declaring the value of the structure you actually use is not.

Worked example: silicone kitchen utensil set ($29.99 retail, shipped DDP from China)

Every assumption below is labeled. Tariff rates were checked on 2026-10-13. Cost inputs are placeholders: replace them with your own quotes.

Assumptions behind the example:

• Classification: HTS 3924.10.40 ("tableware and kitchenware of plastics: other"). CBP has classified silicone spatulas under this subheading, for example in ruling NY N031080. A mixed set with metal tongs, whisks or wooden parts may be classified differently (see NY N110377), so confirm your own product.
• Origin: China. No exemption under U.S. note 52 to HTS Chapter 99 applies to this subheading.
• Dutiable value: $29.99, the price the US customer pays for the goods, with shipping charged separately or not at all (see the valuation section above).
• Stacking: U.S. note 52(a) states that goods subject to the 12.5% duty also remain subject to the general (MFN) rate and to other Chapter 99 subchapter III duties, such as China Section 301 Lists 1–4A.
• Not included: ad spend, platform and payment fees, returns, currency costs and any state sales tax handled by the marketplace.

What if your product is on Section 301 List 3?

The duties stack. Suppose a product at the same 3.4% MFN rate were classified under a List 3 subheading. It would pay 3.4% + 25% (9903.88.03) + 12.5% (9903.05.31) = 40.9%, or $12.27 on a $29.99 dutiable value. That gives a landed cost of about $28.54 and leaves only $1.45 of margin. A wrong HTS code can therefore turn a viable product into a loss-maker, or put you on the wrong side of a CBP audit. Check the USTR Section 301 China tariff actions and your code's Chapter 99 coverage before you price.

Tip: build this table for your top 10 SKUs before Black Friday. Under DDP, a wrong HTS code produces a wrong price at checkout.

How do you set up DDP shipping from China on Shopify and TikTok Shop?

Price your products to cover duty, then tell buyers plainly that nothing is due on delivery.

Shopify

• Selling into the US from China: build the landed cost into your product price. Shopify Managed Markets is designed for merchants based in the continental US (and certain Canadian and UK stores) who sell internationally. It does not calculate the US import duty on goods you ship in from China.
• Selling internationally with Managed Markets: on August 24, 2026, Managed Markets stopped supporting DDU wherever it supports DDP, and those markets moved to DDP automatically (Shopify changelog, August 11, 2026). If you want pay-on-delivery in those markets, Shopify's instruction is to turn Managed Markets off.
• Add accurate HS codes and country of origin to every product. Remove any "duties may be charged on delivery" wording from your shipping policy, FAQ and order emails if you ship DDP.
• Place a test order and check the total and the confirmation email.

TikTok Shop

• Price all-in from the start, and leave enough margin to absorb duty during discounted promotions.
• Use a shipping setup in which the importer of record and the duty payer are agreed in writing, so no buyer is asked to pay a carrier bill on an impulse purchase.
• Check TikTok Shop's current requirements for your seller type (US-local or cross-border) before choosing how to ship.

Crowdfunding: how do you budget duties into pledge levels?

You can't change a pledge price after the campaign, and backers dislike surprise fees. For each reward tier:

• Calculate duty using the reward's actual HTS code, origin and dutiable value. Add a buffer in case rates change before you ship. Pick the buffer size yourself based on your timeline, because tariff actions in 2025–2026 changed several times within months.
• Say "US duties included" on the pledge card and in the campaign FAQ. Charge shipping by region in your pledge manager.
• For larger campaigns, compare per-backer DDP parcels with one bulk import to a US fulfillment center. Bulk entry usually has a lower duty base but adds freight, bond, broker and warehouse costs.

Our Kickstarter and Indiegogo fulfillment service can quote both routes before you lock in reward prices.

CPSC eFiling: what changes on October 22, 2026?

From October 22, 2026, regulated consumer products arriving by international mail must have their certificate data eFiled. For most other imports, eFiling has been required since July 8, 2026. In detail:

• Since July 8, 2026: importers of products that need a Children's Product Certificate (CPC) or General Certificate of Conformity (GCC) must eFile the certificate data at entry. This covers formal and informal entries, so courier and private-line parcels are included. Products entered from a Foreign Trade Zone follow from January 8, 2027 (CPSC: Certificates of Compliance and eFiling; CPSC final rule, 90 FR 1800).
• From October 22, 2026: mail shipments of regulated products must transmit a Full or Reference Message Set through ACE using Entry Type 13 (CPSC bulletin: eFiling guidance for mail shipments). The requirement depends on whether the product needs a certificate, not on the parcel's value.
• Who files: the importer, meaning a party eligible to make entry (owner, purchaser, consignee or authorized customs broker). A broker or shipping line can transmit the data for you, but agree in writing who is responsible.

Checklist before October 22:

• Flag which SKUs need a CPC or GCC: children's products, plus general-use products covered by a CPSC rule, ban or standard. Use CPSC's HTS flag list in the eFiling Document Library as a starting point.
• Get a valid certificate for each one, backed by testing from a CPSC-accepted lab where third-party testing is required.
• If you'll file using a Reference Message Set, register the certificate data in the CPSC Product Registry before the goods arrive.
• Map each SKU to its HTS code and certificate ID in your order export so every parcel can file cleanly.
• Pause or reroute any regulated SKU without a certificate so it isn't held at the border during Q4.

When should you switch from per-order China shipping to a US warehouse?

Consider bulk import once a product sells steadily and duty on the retail price is eating your margin. In the example above, duty on a bulk import based on the $6.00 factory price would be about $0.95 per unit at the same 15.9% rate, compared with $4.77 per parcel shipped direct. Against that saving you must budget ocean or air freight, a customs bond, broker fees, formal entry fees (MPF is 0.3464% of value, minimum $34.58 and maximum $670.86 per formal entry, per the CBP user fee table), US warehousing, domestic last-mile shipping and unsold-stock risk.

A US warehouse is worth modeling when:

• Demand for a SKU is steady enough to forecast a reorder without big overstock risk.
• Duty under per-order DDP is a large share of your selling price, and the duty-base saving exceeds the extra freight, warehouse and entry costs.
• You need 2–5 day US delivery for Q4 cut-offs, platform delivery metrics or Amazon (see our Amazon FBA prep from China service).

Keep testing new products with per-order DDP shipping from China, and move proven sellers into US stock once the comparison favors it.

How Fulfillman can help with DDP shipping from China

Fulfillman is a China-based dropshipping and fulfillment agency. We source products, process orders and ship them worldwide, including on our private line, for which we publish a US transit time of about 5–8 working days. Send us your SKU list and we can help you:

• Compare per-order shipping options for the US. Whichever line you choose, ask who pays duty and who is named as importer of record, and get the answer in writing.
• Gather product data (materials, function, supplier HTS suggestions) so you and your broker can confirm classifications and build a landed cost per unit for your top SKUs.
• Plan when to move proven sellers into bulk shipments for US warehouse or FBA stock.

See how our dropshipping fulfillment service works, or read our tips on faster fulfillment with private line delivery.

Need a DDP quote? Request a free DDP shipping quote for your top SKUs. Include product links, monthly order volume and destination countries, and we'll come back with per-order shipping options and a landed-cost breakdown.

Frequently asked questions

Do I have to pay US duty on a $20 dropshipping order from China?

Yes. Duty-free de minimis treatment is suspended for goods from every country, so a low-value commercial parcel owes all applicable duties and fees. The only choice is whether you pay them up front (DDP) or your customer pays on delivery (DDU/DAP).

Is DDU the same as DAP?

Broadly, yes. The ICC replaced DDU with DAP (Delivered at Place) in Incoterms® 2010, and under both the buyer handles import clearance and pays import duty. Many carriers still use "DDU" as a service label, so check what yours actually covers.

Who is the importer of record when I ship DDP?

The importer of record is whoever is named as the importer on the customs entry. It is not automatically the carrier or the customs broker that files the paperwork. Under DDP it is usually the seller itself, or a non-resident importer the seller appoints, with a licensed customs broker filing on its behalf. Agree in writing who it is, because the importer of record is legally responsible for the accuracy of the classification, value and duty paid.

Does the new 12.5% duty stack with the older China Section 301 tariffs?

Yes. HTS Chapter 99, U.S. note 52(a), states that goods subject to the 12.5% duty (9903.05.31) remain subject to the normal duty rate and to other Chapter 99 subchapter III duties, including China Section 301 Lists 1–4A. Some product categories are exempt, so check your HTS code.

Is duty charged on my supplier price or my retail price?

It depends on which sale is the sale for export to the US. For direct-to-consumer parcels, that is usually your sale to the customer, so duty is normally based on the price the customer pays for the goods. For bulk imports, it is usually your purchase from the supplier.

Can I mark customer orders as gifts to avoid duty?

No. CBP's gift exemption applies only to genuine gifts given without payment. It excludes items given in connection with a purchase, and misdeclaring a sale as a gift can lead to penalties.

Do courier and private-line parcels need CPSC eFiling, or only mail?

Both, if the product needs a CPC or GCC. Most non-mail imports have required eFiled certificate data since July 8, 2026. Mail shipments join on October 22, 2026, through Entry Type 13.

Can I keep pay-on-delivery (DDU) on Shopify?

Managed Markets dropped DDU on August 24, 2026 in every market where it supports DDP, and Shopify says to turn Managed Markets off if you want customers to keep paying on delivery. This applies to international selling. For US customers buying goods you ship from China, set your own pricing and shipping terms.

Sources (checked 2026-10-13)

• CBP interim final rule: de minimis suspension for non-postal shipments (FR Doc. 2026-12670)
• CBP interim final rule: mail shipments and new postal informal entry (FR Doc. 2026-12669)
• CBP E-Commerce FAQs (page last modified Sep 2, 2026)
• USTR Section 301 forced-labor actions, 91 FR 47318 (FR Doc. 2026-15181)
• USITC Harmonized Tariff Schedule, 2026 Revision 21 (3924.10.40; 9903.05.31; 9903.88.03; Ch. 99 notes 20 and 52)
• CBP user fee table (MPF)
• CPSC eFiling guidance for mail shipments and CPSC Certificates of Compliance and eFiling
• ICC Incoterms® 2020
• Shopify changelog: Managed Markets ending DDU support