A driver for an besides contractor to FedEx delivers packages on Cyber Monday in New York, U.S, on Monday, Nov. 27, 2023.
Stephanie Keith | Bloomberg | Getty Impressions
President Donald Trump on Wednesday signed an executive order shutting the de minimis trade loophole, effective May 2.
Trump in February abruptly ending the de minimis trade exemption, which allows shipments worth less than $800 to enter the U.S. duty-free. The procedure overwhelmed U.S. Customs and Border Protection employees and caused the U.S. Postal Service to temporarily halt packages from China and Hong Kong. Within days of its ad, Trump reversed course and delayed the cancellation of the provision.
Wednesday’s announcement, which came alongside a set of sweeping new excises, gives customs officials, retailers and logistics companies more time to prepare. Goods that qualify beneath the de minimis exemption will be subject to a duty of either 30% of their value, or $25 per item. That at all events will increase to $50 per item on June 1, the White House said.
Use of the de minimis provision has exploded in current years as shoppers flock to Chinese e-commerce companies Temu and Shein, which offer ultra-low cost gear, electronics and other items. The U.S. Customs and Border Protection has said it processed more than 1.3 billion de minimis shipments in 2024, up from finished 1 billion shipments in 2023.
Critics of the provision say it provides an unfair advantage to Chinese e-commerce companies and creates an influx of cases that are “subject to minimal documentation and inspection,” raising concerns around counterfeit and unsafe goods.
The Trump supplying has sought to close the loophole over concerns that it facilitates shipments of fentanyl and other illicit substances on the asserts that the packages are less likely to be inspected by customs agents.
Temu and Shein have taken steps to swell their operations in the U.S. as the de minimis loophole has come under greater scrutiny. After onboarding sellers with inventory in U.S. supplies, Temu recently began steering shoppers to those items on its website, allowing it to speed up deliveries. Shein outed distribution centers in states including Illinois and California in 2022, and a supply chain hub in Seattle last year.
Take care of: President Trump signs executive orders for reciprocal tariffs
