President Trump has recently signed an executive order that suspends the de minimis exemption, a policy that allowed low-value parcels shipped to the United States to bypass tariffs. The White House described this move as closing a significant loophole that has enabled shippers to evade tariffs and potentially smuggle dangerous synthetic opioids and substandard products into the country. This new order will take effect on August 29.
Previously, items valued at $800 or less were exempt from tariffs, facilitating overseas retailers in sending inexpensive goods tax-free to American consumers. According to the White House, President Trump is taking decisive action against international shippers who exploit these exemptions for dubious purposes.
This declaration follows Trump’s earlier decision in May, which ended the de minimis exemption specifically for imports from China and Hong Kong. Retail platforms such as Shein and Temu had greatly benefited from this policy, offering ultra-affordable apparel and goods to U.S. customers. Importantly, these regions accounted for the majority of de minimis shipments to the U.S.
The de minimis rule, introduced in the 1930 Tariff Act, was originally designed to streamline trade by removing the burden of collecting modest import duties on low-cost items. However, the influx of low-value parcels has escalated dramatically over the last decade, with Customs and Border Protection processing more than 4 million of these shipments daily.
Retailers like Shein and Temu have faced operational challenges following the suspension of this loophole. For example, Temu has shifted its strategy, ceasing shipments from China and opting to source products from U.S.-based warehouses instead.
This change may have immediate repercussions for a range of retailers and the import market, yet it is intended to enhance border security and ensure compliance with U.S. trade laws. By addressing tariff evasion effectively, the administration aims to support domestic industries and protect consumers from substandard or hazardous products.