The de minimis loophole to end

The Trump administration is ending the de minimis rule that allowed international shipments with a retail value of $800 or less to enter the US without tariff when sent directly to American consumers.

Fast-fashion giants Shein and Temu have been using this rule to their advantage. But President Donald Trump signed an order last week to close the loophole for shipments from China and Hong Kong on May 2. The items will be eligible for a 30% tax of their value, with a minimum fee that will reach $50 per product.

The new taxes are set to begin June 1, per the White House. The goods will also undergo typical customs inspections, which were exempted earlier.

Ending the de minimis rule has garnered bipartisan support over the years. Former President Joe Biden received a letter from 126 House Democrats in 2024, urging him to apply inspections and duty fees shipments using the tax loophole.

Supporters say it’s a win for US manufacturers and a move to stem the flow of counterfeit goods and fentanyl. The National Council of Textile Organizations says it had around 1.4 billion de minimis shipments in America last year.

Critics warn that the crackdown will hit low-income consumers the hardest. A study by the National Bureau of Economic Research projects Americans would end up paying an additional $10.9 billion to $13 billion annually for their purchases.

While Trump’s order only targets China and Hong Kong for now, trade groups are already pushing to expand it globally.