Trump Closes De Minimis Loophole for China Imports

President Donald Trump has signed an executive order, effective May 2, to close the 'de minimis' loophole that allowed low-value parcels from China to enter the United States tariff-free. The exemption for goods valued under $800 has been exploited by Chinese e-commerce giants like Shein and Temu, leading to an increase in duty-free imports from $5.3 billion in 2018 to $66 billion in 2023. The administration cited national security concerns, including the smuggling of fentanyl, as reasons for closing the loophole, noting it overwhelmed customs and facilitated illegal activities. The new regulation imposes a duty rate of 30% or $25 per item, increasing to $50 after June 1, and requires carriers to provide shipment details to Customs and Border Protection. This move is expected to impact the e-commerce landscape, potentially raising costs for consumers and creating logistical challenges as US Customs adjusts to more shipments requiring formal processing. The change follows previous attempts by Trump to close the loophole, which were delayed due to logistical readiness concerns from US agencies.