( NewsNation ) — President Donald Trump is closing a trade loophole that lets discount stores such as Shein and Temu dodge tariffs on inexpensive products from China.
Trump signed an executive order Wednesday to end the so-called “de minimis” exemption on merchandise from China and Hong Kong. The rule allowed companies to avoid import taxes and certain customs paperwork on packages worth $800 or less.
This choice might result in increased expenses for customers shopping at discount platforms such as Shein and Temu—platforms that have utilized this exception to offer extremely low-priced items and swiftly grow their presence in the U.S. market.
Beginning May 2nd, low-value goods coming from China will be subject to a tariff set at either 30% of their worth or $25 for each product. as stated in a fact sheet from the White House The monetary value will be raised to $50 starting from June 1st.
As online shopping and direct-to-consumer sales have grown, so too has the utilization of the de minimis exemption. In the previous year, approximately 1.4 billion packages arrived in the U.S. via the duty-free channel, which is over twice as many as the 636 million documented back in 2020. as per the U.S. Customs and Border Protection .
Lawmakers on both sides of the political spectrum In recent years, they have advocated for changing the de minimis rule, expressing concerns that this exemption facilitates drug smuggling into the nation.
Over 90% of all packages entering the U.S. currently arrive through de minimis, with approximately 60% originating from China. according to Reuters .
Why is Trump terminating the waiver?
The White House states that shutting down the trade loophole is essential for combating the influx of lethal substances such as fentanyl originating from China.
This occurs because imports entering the country via the de minimis exemption usually undergo lesser scrutiny and oversight compared to bigger shipments.
"President Trump is addressing misleading shipping methods employed by China-based shippers who often conceal illegal items, such as synthetic opioids, within small parcels to take advantage of the de minimis exemption," according to the White House statement.
On a typical day, CBP handles more than 4 million low-value shipments entering the U.S.—a massive amount that criminals are taking advantage of to smuggle illicit drugs. agency has warned .
The Biden administration also took steps To address the issue, they suggested amending regulations with a specific focus on inexpensive products imported from China. At that time, Democratic representatives employed a comparable rationale for their proposal.
"The significant rise in de minimis shipments has made it progressively harder to identify and prevent illicit or hazardous deliveries entering the U.S. via this channel," said Daleep Singh, who serves as the deputy national security adviser to President Biden. said back in September .
Following the failure of the House to pass legislation aimed at reducing the de minimis exemption, Democratic lawmakers took action. called on Biden to utilize his presidential powers to modify the regulation.
The National Council of Textile Organizations, which represents American manufacturing firms, commended President Trump for his efforts. move Thursday , describing it as "well past due."
Will Temu and Shein items cost more?
Eliminating the de minimis threshold for products coming from China might significantly affect discount platforms such as Shein and Temu, which are renowned for offering extremely low-cost apparel, household items, and various other goods.
A 2023 report According to findings from the House Select Committee on China’s Communist Party, Shein and Temu account for over 30% of daily shipments arriving in the U.S. via the de minimis exception.
Under the revised rules, consumers can still purchase items from Shein and Temu, though these products might come with higher price tags.
The Cato Institute, which has a lean towards libertarian ideology, argues that terminating the exemption will "lead to significantly adverse consequences for Americans, especially those with lower incomes."
The think tank cited research papers demonstrating that the most economically disadvantaged areas in America get a higher volume of small-value packages, especially from China, when compared to the wealthiest regions.
Additionally, one must account for administrative expenses. In February, Trump briefly eliminated the duty-free status for inexpensive Chinese imports; however, he changed his stance when shipments began accumulating at U.S. Customs.
The National Foreign Trade Council, which includes members such as FedEx, UPS, and DHL along with retail giants like Amazon and Walmart, has defended the exemption And mentioned that limiting it would lead to higher taxes for American households. The council stated that decreasing the de minimis threshold would double the cost of a $50 package.
A further issue could be that retailers might determine continuing air freight for inexpensive items to the U.S. is not cost-effective anymore, opting instead for shipping via containers, which would result in extended delivery periods.
Temu and Shein did not reply to NewsNation’s queries regarding how customers in the U.S. might be impacted by the alteration in policy.
In recent years, both firms have implemented measures to expand their presence within the U.S., potentially mitigating the impact.
Recently, Temu has begun directing customers towards "local" products—items that can be delivered from fulfillment centers within the U.S. CNBC reported The business news source reported that Shein established distribution centers in states such as Illinois and California in 2022, along with setting up a supply chain hub in Seattle previously year.
Will smaller international parcels be impacted?
The modification of the de minimis rule currently affects only inexpensive products originating from China and Hong Kong. This implies that items with a value of $800 or lower imported from nations such as Canada or Mexico can continue to be admitted into the U.S. without duties.
Nevertheless, parcels originating from elsewhere globally might lose their exemption shortly. A different executive order Issued on Wednesday stated that the de minimis exemption will be eliminated as soon as a mechanism for "swiftly processing and collecting" the tariffs is established.
Research has found Eliminating this provision entirely could lead to expenses ranging from $11 billion to $13 billion for U.S. consumers, with a particularly adverse impact on low-income and minority families.
Copyright 2025 Nexstar Media, Inc. All rights reserved. This content must not be published, broadcast, rewritten, or redistributed.To stay updated with the newest information, check out the weather, sports, and stream videos at ConchoValleyHomepage.com.