The Trump administration has terminated duty-free access for low-value shipments from China and Hong Kong, effective May 2, 2025, eliminating the "de minimis" exemption under Section 321 of the Tariff Act of 1930. This loophole, previously used by e-commerce giants like Shein and Temu , as well as traffickers of illicit goods like fentanyl, allowed packages valued up to $800 to enter the U.S. duty-free, enabling foreign retailers to offer lower prices than U.S. competitors.
Originally enacted in 1938 to reduce administrative costs for negligible duties, the exemption has now been closed, increasing costs for imported goods. The change also introduces significant administrative challenges for U.S. Customs and Border Protection (CBP) and importers, who must now inspect millions of additional packages daily, likely causing shipment delays.
Under new CBP guidelines, shipments from China and Hong Kong face a 145% tariff plus existing duties, except for exempted products like smartphones. Express shippers like FedEx, UPS, and DHL will handle most of these. Postal shipments valued up to $800 are subject to a 120% tax or a $100 flat fee per package, increasing to $200 in June 2025.
De minis is kinda similar to ban on Chinese 'gift/parcel imports' India imposed in 2020
This is similar to the major crackdown by the Indian government on online purchases of goods from Chinese e-commerce platforms that were escaping customs duty and goods and services tax in 2019. Many Chinese e-commerce platforms were shipping goods ordered by Indians to various cities claiming these were “gifts”. As per the domestic laws, any gifts received by Indians up to Rs 5,000 don’t attract any taxes.
The clamp down was announced after there were reports that the Chinese retailers such as Club Factory, AliExpress and Shein were taking undue advantage of the exemption from customs duties by shipping their products as gifts and billing them under Rs 5,000 to avoid import duties. “It is often brought to the notice that authorised registered couriers are outsourcing activities without prior permission from or intimation to customs.. and without exercising necessary due diligence and checks,” an official communication by customs department read. Almost a year later, in June 2020, the Indian government banned these Chinese shopping apps along with some 50 other apps across categories.
Donald Trump calls "De minimis" a Big Scam
President Donald Trump has called the de minimis exemption "a big scam going on against our country, against really small businesses." "We put an end to it," he said.
Originally enacted in 1938 to reduce administrative costs for negligible duties, the exemption has now been closed, increasing costs for imported goods. The change also introduces significant administrative challenges for U.S. Customs and Border Protection (CBP) and importers, who must now inspect millions of additional packages daily, likely causing shipment delays.
Under new CBP guidelines, shipments from China and Hong Kong face a 145% tariff plus existing duties, except for exempted products like smartphones. Express shippers like FedEx, UPS, and DHL will handle most of these. Postal shipments valued up to $800 are subject to a 120% tax or a $100 flat fee per package, increasing to $200 in June 2025.
De minis is kinda similar to ban on Chinese 'gift/parcel imports' India imposed in 2020
This is similar to the major crackdown by the Indian government on online purchases of goods from Chinese e-commerce platforms that were escaping customs duty and goods and services tax in 2019. Many Chinese e-commerce platforms were shipping goods ordered by Indians to various cities claiming these were “gifts”. As per the domestic laws, any gifts received by Indians up to Rs 5,000 don’t attract any taxes.
The clamp down was announced after there were reports that the Chinese retailers such as Club Factory, AliExpress and Shein were taking undue advantage of the exemption from customs duties by shipping their products as gifts and billing them under Rs 5,000 to avoid import duties. “It is often brought to the notice that authorised registered couriers are outsourcing activities without prior permission from or intimation to customs.. and without exercising necessary due diligence and checks,” an official communication by customs department read. Almost a year later, in June 2020, the Indian government banned these Chinese shopping apps along with some 50 other apps across categories.
Donald Trump calls "De minimis" a Big Scam
President Donald Trump has called the de minimis exemption "a big scam going on against our country, against really small businesses." "We put an end to it," he said.
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