An important change in the tariff regulations for low-value parcels shipped to the United States took effect at 12:01 a.m. on Friday. According to officials from the Trump administration, President Trump signed an executive order that effectively suspends the de minimis exemption, a policy that previously allowed parcels valued at $800 or less to enter the U.S. without incurring tariffs. This decision aims to address what the White House described as a significant loophole exploited by shippers to bypass tariffs.
The White House has indicated that the termination of the de minimis exemption is a crucial step in closing a gap that has allowed shippers to evade tariffs and potentially introduce dangerous synthetic opioids into the U.S. market. By ending this exemption, the administration hopes to reduce the influx of low-cost goods that could undermine domestic markets and contribute to public health crises.
According to White House trade adviser Peter Navarro, the suspension of the de minimis privilege is expected to save thousands of American lives by limiting the flow of narcotics and other prohibited items. Additionally, the new policy is projected to generate up to $10 billion annually in tariff revenues for the U.S. Treasury, a significant boost for the national economy.
Despite the immediate end of the de minimis exemption, there will be a transition period lasting six months. During this time, postal service shippers will have the option to pay a flat duty ranging from $80 to $200 per package, based on the country of origin. This transition aims to mitigate the impact on shippers and allow time for compliance with the new regulations.
The suspension of the de minimis exemption particularly affects e-commerce retailers that have taken advantage of this loophole to offer low-cost goods to U.S. consumers. Notably, companies like Shein and Temu, which specialize in ultra low-cost apparel and other goods, have been significantly impacted. Following the initial suspension of the exemption for imports from China and Hong Kong in May, these retailers were forced to adapt their business models.
In response to the changing landscape, Temu has halted shipments of Chinese goods to American customers and is now focusing on selling products sourced from its U.S. warehouses. This shift reflects the broader challenges faced by retailers as they navigate the new tariff landscape.
The de minimis provision was originally added to the Tariff Act of 1930 to streamline trade by removing the administrative burden associated with collecting modest import duties on low-cost items. However, over the past decade, the volume of low-value parcels entering the U.S. has skyrocketed, with shipments rising from 134 million per year in 2015 to nearly 1.4 billion by 2025. This exponential growth has led to Customs and Border Patrol processing over 4 million de minimis shipments daily, prompting the need for regulatory reform.
As the United States implements these new tariff regulations, it marks a significant shift in how low-value imports are managed, reflecting broader concerns about trade practices and public safety. The end of the de minimis exemption is a pivotal moment in U.S. trade policy, aiming to balance economic interests with the need for consumer protection and public health.
