In February, the Trump administration moved to do away with a little-known rule that permits US shoppers to keep away from tariffs on low-value packages. The de minimis exemption meant that packages valued below $800 may enter the US duty-free, and consumers — in addition to retailers — relied on the exemption commonly, even when they didn’t understand it. Almost 1.4 billion packages claiming the exemption entered the US in 2024, the vast majority of which got here from China. The removing of this exemption has been paused since early February, which means Temu and Shein packages have been capable of circulate into the nation with out duties. However not.
As of Could 2nd, low-value packages from China and Hong Kong will get tariffed based mostly on Trump’s new taxes: packages valued below $800 and despatched via the worldwide postal community (suppose USPS and the like) will get slapped with a price of 90 p.c of the worth of the package deal or $75 per postal merchandise. Different packages (which seems to imply parcels transported by providers like DHL) will as an alternative get hit with all of the duties that they had beforehand been exempt from: not simply baseline tariffs on Chinese language packages that Trump has already carried out, but additionally product-specific duties that might be even larger than 10 or 20 p.c. If you’re a median client shopping for issues from Temu or different retailers that ship immediately from China to your US deal with, the newly assessed charges are more likely to be a shock.
The difficulty with the plan to finish de minimis the primary time (which was rapidly paused) is that it created chaos within the postal system as a result of the change was so sudden. USPS issued (after which retracted) an announcement saying it was suspending all shipments coming from China and Hong Kong, and consumers instantly started noticing added charges on their purchases they weren’t ready for. On the time, the White Home stated it was pausing the tip of the exemption till “sufficient techniques are in place to completely and expediently course of and acquire tariff income.” The brand new de minimis tariff construction is in some methods extra simplified, however nonetheless leaves questions on whether or not the mandatory techniques are in place to being to course of the a couple of billion packages. DHL equally had a flip-flop in April, suspending after which resuming sure US shipments after reaching some form of settlement with the US authorities.
De minimis packages are also capable of enter the US with out going via extra formal entry processes, and it’s not instantly clear how Customs and Border Safety would deal with the hundreds of thousands of low worth packages getting into the US on a regular basis. Some research have estimated that processing de minimis packages would price the US roughly $3.2 billion a 12 months. The manager order carves out the suitable to require formal entry (the place packages require detailed paperwork) at CBP’s discretion, however it’s not clear whether or not all de minimis packages could be topic to that course of. That is vital, as a result of the Trump administration has framed ending the exemption as a technique of cracking down on artificial opioids getting into the US — it’s not instantly clear how they might be higher at catching illicit medicine coming in below the brand new de minimis rule.
Corporations like Shein, Temu, and Amazon Haul depend upon de minimis exemptions to assist maintain prices extremely low, and have formed their enterprise fashions round immediately transport to prospects in small batches. Further tariffs will elevate prices for shoppers in a method or one other: a number of the taxes might be rolled into the price of merchandise, or consumers might be required to pay the charges to get their packages launched from carriers. The consequences may additionally hit shoppers in one other approach: US consumers may simply find yourself having fewer issues in the stores.
Replace, Could 2nd: President Trump’s government order to finish the de minimis exemption on packages from China and Hong Kong took impact. The story has been up to date to mirror these modifications.
