A loophole that has allowed American shoppers to buy lots of cheap goods from mainland China and Hong Kong without paying tariffs and filling customs forms is closing on Friday.
Prices have already gone up.
Orders for many imported goods from retailers like Shein and Temu could dwindle as consumers balk at the higher prices and new inconveniences. But, like much of Mr. Trump’s trade war, the administration’s policy on the loophole has gone through changes. He had ordered that the loophole be closed in February, but then reinstated it within a few days. Logistics experts said the short closure caused a pileup of packages at the borders.
What exactly is going away?
Since 2016, items worth $800 or less could be imported into the United States without the recipient’s paying tariffs or even filing the paperwork typically associated with purchases of foreign goods. The loophole is known as the de minimis exemption. Mr. Trump is eliminating the exemption only for goods from mainland China, the largest source of de minimis shipments, and Hong Kong.
A report for Congress this year said Customs and Border Protection processed over one billion de minimis packages a year. The average value of the shipments in 2023 was $54.
Shipments worth under $800 have been exempt because Congress believed the expense and inconvenience of processing them would not justify the customs revenue. Mr. Trump is ending the exemption, in part, to try to prevent the flow of fentanyl and fentanyl’s precursor substances into the United States via de minimis shipments.
De minimis shipments ballooned after Mr. Trump imposed tariffs on China during his first administration, suggesting that people and businesses were turning to smaller packages to avoid tariffs.
