Section 321 explained: legally ship duty-free under $800 to the US

US Customs allows up to $800 of merchandise per consignee per day to enter the country duty-free, tax-free, and with no formal entry. The rule lives in Section 321 of the Tariff Act of 1930. If you sell direct-to-consumer into the US from abroad, this is the most important customs rule you'll deal with.

The rule, plainly

• Limit: $800 fair-market value per consignee per day
• Eligible: most consumer goods. Excluded: alcohol, tobacco, goods subject to absolute quotas, and certain regulated categories (some textiles, some food).
• Documentation: no formal entry required. The carrier files an electronic manifest (T86 entry).
• Time: clears in hours, not days.

If your shipment qualifies, you pay $0 in duty and the package clears in 2-4 hours instead of 1-3 days.

Why this changed direct-to-consumer e-commerce

Before 2016, the limit was $200. Raising it to $800 unlocked the entire Shein/Temu/Amazon Marketplace model. The math:

• 1,000 t-shirts ($15 each, $15,000 total) from China to a US warehouse: ~$2,500 duty + entry
• 1,000 t-shirts shipped one at a time to 1,000 consumers via Section 321: $0 duty

That is why every cross-border DTC fulfillment center on the planet now runs through Section 321 fulfillment: store the inventory in Canada or Mexico, ship directly to US consumers one parcel at a time.

The Section 321 fulfillment playbook

1. Bond your inventory in a Canadian or Mexican 3PL within 100-300 mi of the US border
2. When a US order comes in, ship from that 3PL as an individual parcel to the US consumer
3. The parcel clears under T86 — duty-free, no formal entry, 2-4 hour clearance
4. Customer gets the package in 3-5 days as if you shipped from a US warehouse

Big 3PLs running this pattern: Stallion (Toronto), Chit Chats (Toronto + Mexico City), Aplus (Tijuana). Annual volume processed this way is in the hundreds of millions of parcels.

The 2026 changes you need to know

US Customs and Border Protection has proposed two significant changes:

Change 1: Section 321 for China-origin goods may end

As of mid-2026, goods of Chinese origin may no longer qualify for Section 321 entry, regardless of where they're shipped from. If a Chinese-made t-shirt is shipped from a Canadian warehouse to a US consumer, it would still be subject to standard duty + Section 301 tariffs.

This is the single biggest disruption to the cross-border DTC model in a decade. Watch the Federal Register; the rule has been proposed but not finalized as of June 2026.

Change 2: Increased screening of T86 entries

CBP is screening T86 entries at much higher rates than before. Containers full of Section 321 parcels can be opened for inspection, delayed 24-72 hours, and individual parcels can be flagged for formal entry retroactively. Plan for occasional hold delays in your customer-promise SLA.

Compliance checklist

• Don't split a single order into multiple parcels to game the $800 limit — CBP audits this. The "one consignee per day" rule includes split orders.
• Get the origin country right on every parcel. If you sell goods from multiple origins, the commercial invoice must reflect each.
• Keep your HS codes accurate. Section 321 entries still require HS codes for many goods.
• Some carriers don't support T86. UPS, FedEx International Economy, and DHL eCommerce all do. USPS does via certain pathways. Check before booking.

How Atlas helps

We handle T86 entry filing automatically for qualifying parcels routed via DHL eCommerce or UPS Mail Innovations. The shipment value, HS codes, and consignee data flow from our database to the carrier without manual intervention. Get started or calculate landed cost on a sample order to see if Section 321 is right for your goods.