HR1, also known as the Big Beautiful Bill, has officially passed and become law. There are a number of provisions within this reconciliation bill that will directly affect product-based business owners and self-employed people.
Let’s talk about those changes, how they’re likely to affect you, and what you can do about it.
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Tariff Changes
This ongoing tariff saga has been nothing but chaotic, and unfortunately, that chaos and uncertainty will continue… for now.
Earlier this year, Trump announced sweeping “reciprocal” tariffs, sometimes called the Liberation Day tariffs, that would slap a universal 10% duty on nearly all imported goods, plus additional country-specific rates. These tariffs were set to kick in back in April, but they were put on hold for what was supposed to be a 90-day negotiation period, with Trump promising 90 deals in 90 days.
Well, that deadline was originally set to expire July 9th, but as of last week, the White House officially extended the pause until August 1st to allow more time for talks. So far, only a handful of tentative agreements have been announced, and most countries haven’t finalized any exemptions or adjusted terms.
And there has been conflicting information coming from White House officials, some saying the phone has been ringing off the hook with countries wanting to make deals, and others saying none of the countries have engaged in negotiations at all.
At this point, instead of conventional trade negotiations, Trump has been saying he’s just going to send letter to each country specifying what their tariff rates will be. If no deals are reached by the new deadline, we could see those original reciprocal tariffs be implemented. I covered this initially on episode 323. How to Protect Your eCommerce Business From Trump’s New Tariffs, if you want a refresher on the details of those.
Ultimately, as of right now, the tariffs are still on hold, and we’ll just have to wait and see what happens at the beginning of next month.
De Minimis Changes in the “Big Beautiful Bill”
Something we did get clarity on in this bill is the change to the De Minimis Exemption. This is the rule that lets you order products from overseas and skip paying import duties if the shipment is under $800.
Earlier this year, Trump removed this exemption for packages from China, Hong Kong, and Vietnam… but kept it in place for all other countries. So if you’re based in Canada, the UK, the EU, etc., and sell to customers in the USA, as long as the purchase was under $800, it was still exempt from any tariffs.
HR1 changes that. Starting July 1st, 2027, the De Minimis exemption will end for every country. After that date, all imports, regardless of value, will be subject to customs duties.
The good news is, you have two years to prepare. And things could change before it takes effect. Being that it’s written into law, though, there’s no guarantee that would happen. It would require a new law through Congress, potentially court cases, or new trade deals that include a provision guaranteeing carve-outs for specific countries.
The bad news, as discussed in previous episodes, this is going to change cross-border selling as we know it. If you are outside the US but sell the majority to US customers, it might be time to start building up more of a local footprint or to expand into other countries that don’t have excessive tariffs on you.
If you are going to continue to sell to US customers even after the De Minimis is revoked, there are a few things you can do to be more transparent with your customers. While it’s not your responsibility to collect and remit these duties on your customer’s behalf, it might be in your best interest to do so.
As we saw at the beginning of this implementation, customers were taking to social media to complain, and ultimately, everyone ends up blaming the retailer because they don’t understand how tariffs work.
While it does take a bit of extra work on your part, it will help to limit confusion and customer service issues.
The easiest way to do this is to install an app that can surface Tariff charges as a separate line item at checkout and then purchase duty-paid labels so your customers don’t get hit with a separate bill.
If you manufacture overseas and import your finished goods, then it might be time to look at bonded warehouses. Bonded warehouses allow you to hold goods typically up to 5 years, which means you don’t have to pay the duties on those items until you sell them and ship them to a US customer.
If you end up selling that product internationally, aka re-exporting it, say to a Canadian customer, you don’t have to pay the US tariff.
If you’re importing a high volume of goods, this can make a huge difference in your cash flow, not needing to shell out all those duties upfront. Bonded warehouses come with lots of regulations to be compliant, but some 3PLs offer bonded warehouses, so you might be better off outsourcing this.
Ultimately, you have time before you have to worry about this, and things could change, but the sooner you start planning, the better.
ACA and Health Insurance Changes
Alright, if you’re not based in the US, you can skip the rest of this episode because now I want to chat about the changes to health insurance and taxes in the US… and this affects you even if you’re covered through an employer sponsored insurance plan say through a full-time job or a spouse.
The biggest change to the ACA is the removal of the enhanced subsidies in the American Rescue Plan and the Inflation Reduction Act. I won’t get into all the nitty gritty here, it’s a little bit complicated because it’s based on your income compared to the poverty level, etc. Essentially, there was an expansion in who was eligible for subsidies, and an increase in the subsidy itself. That is all going away back to pre-2021 levels, and it starts with your 2026 enrollment on November 1st.
If you’re not sure what your current subsidy is, you can find it on your eligibility document. Log in to healthcare.gov or your state’s portal, and you’ll find it there. The subsidy listed there will either get lower or go away altogether.
This might also depend on where you live. There are certain states, CA, NY, NJ, WA, CO, CT, VT, and MA, that already have state subsidy programs. They may expand them to cover more people, but I don’t think there’s anything set in stone just yet. Keep your eyes and ears peeled.
Medicaid Changes
There are also big changes to Medicaid, which start at the beginning of 2027. States are given a year to implement the changes, so you’ll likely see rolling effects depending on where you live.
When we talk about cuts to Medicaid, it’s easy to think they only impact the people who have Medicaid coverage. But in reality, these changes ripple out to affect everyone, no matter how you get your insurance.
Insurance only works because everyone pays into the same pot, and the costs are shared across a big, diverse group. That’s the risk pool. When people lose Medicaid—because of tighter eligibility, more paperwork, or work requirements—they don’t magically stop needing healthcare. They still get sick, still have emergencies, and still end up at the hospital.
The difference is that, without coverage, they can’t pay their bills. Hospitals and clinics have to absorb those unpaid costs. And over time, that uncompensated care gets passed along to everyone else in the form of higher charges to private insurance and higher premiums for businesses and self-employed people.
Plus, it’s likely to increase wait times, force some hospitals, especially in rural areas, to cut services or even close, and make it harder for everyone to get timely care when they need it. The bill does include a rural health transformation fund to help states prevent hospital closures, but it’s unclear if it’s enough to cover the expected shortfall.
I don’t want to get too in the weeds here, you can do your own research on this, but the point is… the healthcare and insurance industry is going to have to make up this shortfall somewhere, and that’s likely going to be reflected in our insurance premiums.
What’s unclear is when these increases will hit. While the medicaid changes don’t go into effect until 2027, I would pay close attention to any changes during the next open enrollment period at the end of this year for your 2026 coverage, but they may decide to start increasing premiums in anticipation of these changes.
Tax Changes
Before we wrap up, I want to flag a few other areas in HR1 that you might want to look into, especially as a self-employed person running a product-based business.
First, some of the tax rules from the 2017 tax reform have been extended or adjusted. That includes things like the 20% pass-through deduction, bonus depreciation, and changes to how you can write off research and development expenses. If you’re investing in equipment, technology, or even improvements to your space, this could have a big impact on your deductions.
This is particularly important if you have a physical location, like a brick-and-mortar retail store, a warehouse, or a fulfillment space, because there are specific rules around what kinds of renovations or build-outs you can fully expense in the year you do them. For example, upgrading lighting, fixtures, or interiors often qualifies differently than buying the building itself.
I am not a tax professional, and this isn’t tax advice, so definitely connect with your accountant or tax preparer. They can help you figure out exactly which changes apply to your situation, what’s staying the same, and what’s worth planning for before the end of the year.
Listen to the Episode
Timestamps
00:00 Introduction and Overview
01:21 Tariffs and Trade Policies
03:01 De Minimis Exemption Changes
04:34 Strategies for Managing Tariffs
06:47 Health Insurance and Tax Changes
10:18 Tax Rules and Deductions
11:59 Conclusion and Resources
Episodes Mentioned
305. How the 2024 Election Could Affect Product-Based Business Owners
314. Navigating 2025: What Product-Based Business Owners Need to Know
323. How to Protect Your eCommerce Business From Trump’s New Tariffs
Links Mentioned
State Health Insurance Subsidies
