Trump eliminates de minimis loophole to impact cheap imports

In the United States, President Donald Trump signed an executive order on a Wednesday that aims to close the de minimis trade loophole, effective May 2, 2025. This provision previously allowed shipments worth less than $800 to enter the country without incurring tariffs, which has benefited foreign retailers, particularly those in China. By eliminating this loophole, the new rule will subject such goods to a duty of either 30% of the item's value or $25 per item; this tariff will increase to $50 per item after June 1. The administration's move comes amidst concerns regarding the rise in low-cost Chinese e-commerce retailers like Shein and Temu, which have exploited the de minimis exemption to deliver products to American consumers at very low prices. The Trump administration's announcement is part of an ongoing strategy to address concerns about the influx of synthetic opioids and other dangerous substances entering the U.S. from abroad. Critics argue that the de minimis provision has created unfair competition for American businesses that face high import tariffs. Furthermore, it is claimed that the loophole has allowed packages to enter the U.S. with minimal documentation, increasing the likelihood of counterfeit goods while raising public safety concerns. The White House has emphasized that many Chinese shippers misuse the loophole by masking illegal items in low-value packages, thus evading scrutiny from customs agents. In addition to the executive order, broad tariffs on various imported goods have also been announced, indicating a strategic shift in trade policy aimed at containing adversarial economic practices and protecting domestic markets from foreign competitors.