The White House closed the so-called de minimis tariff loophole for lower-value Chinese imports Friday but also waived a customs rule that will make collecting those tariffs very difficult, trade experts say.
As part of its ongoing trade war, which is focused now particularly on China, the Trump administration formally ended the small-package exemption that requires import levies on goods from China worth $800 or less.
That exemption was worth a fortune to online retailers like Temu, Shein and Amazon as well as package shippers that import goods from China for U.S. consumers at large scale.
“Duty-free de minimis treatment … shall no longer be available for products of the [People’s Republic of China] ... on or after 12:01 am [EDT] on May 2, 2025,” the White House ordered on April 2.
President Trump called the exemption a “scam” during a Cabinet meeting this week in which he acknowledged that tariffs could push up prices, as many economists have been arguing, and potentially even lead to shortages of goods.
“De minimis — it’s very, it's a big deal. It's a big scam going on against our country, against really small businesses and we've ended it. We put an end to it,” Trump said on Wednesday.
Economists said Friday that the tariff could be visible to U.S. consumers.
“The tax is unlikely to show up in consumer price data … but it is a visible price increase to many US consumers – a reminder that they, not exporters, pay trade tariffs,” UBS economist Paul Donovan wrote in a Friday note to investors.
EY economist Gregory Daco also said the loophole closure would have an effect on prices.
“The elimination of the ‘de minimis’ exemption now subjects even low-value imports to tariffs, squeezing already-thin margins and driving up end prices,” he wrote in an analysis.
However, the administration also waived a customs rule this week that trade experts say will make it tough to collect the newly reinstated tariffs.
The waiver gets rid of formal entry requirements, entailing tariffs and inspections, for goods worth more than $250 that are subject to additional penalty tariffs, which is most goods after Turmp’s April 2 tariff announcement.
“The Trump administration’s quiet waiver of a longstanding customs rule requiring Formal Entry for goods valued between $250 and $2500 that are subject to ‘penalty’ tariffs will make it extremely difficult to collect tariffs on the millions of daily e-commerce shipments from China,” trade watchers at the American Economic Liberties Project warned Wednesday.
Rethink Trade director Lori Wallach said the waiver will end up gutting enforcement of the cancelled exemption.
“Waiving this longstanding Customs rule will gut enforcement and collection. This rollback also undermines collection of ALL ‘Liberation Day’ tariffs,” she wrote in a social media commentary.
International shipping company DHL said it had a “constructive dialogue” with the government in recent days over regulatory changes.
“This decision follows constructive dialogue between DHL and the U.S. government, who demonstrated a strong willingness to understand our operational and technical challenges, and who agreed that it was imperative to act quickly,” the company said in a statement.
Gabriel Wildau, a China specialist at financial advisory company Teneo, told The Hill that the end of the de minimis exemption will put pressure on Chinese exporters to use intermediate countries that still have access to the tariff workaround.
“The de minimis exemption still applies to non-China countries,” he said Friday. “I expect to see the Chinese e-commerce retailers adapt by using countries like Mexico and Canada as collection points for low-value packages.”
Earlier this year, Trump made a previous move to end the de minimis tariff exemption but yanked the order after packages started piling up at U.S. ports of entry, citing the need for “adequate systems [to be put] in place to fully and expediently process and collect tariff revenue.”
China and the U.S. are locked in a standoff over Trump’s trade war, with the two countries imposing triple-digit tariffs on each other that are leading to rapidly diminishing trade volumes and a slowdown in port activity.
Last week, markets popped on reported remarks from Treasury Secretary Scott Bessent, who said in a meeting with financial bosses that the trade situation with China was “unsustainable.”
Trade talks did not happen following Bessent’s remarks and China maintained that the ball on trade was in the U.S.’s court. However, China’s tone softened in a Friday statement from the Ministry of Commerce.
“The US has recently taken the initiative to convey information to China through relevant parties many times, hoping to talk with China,” A Chinese Commerce Ministry official said. “China is currently evaluating this.”
Read More Details
Finally We wish PressBee provided you with enough information of ( Trump ends small package tariff exemption while waiving customs rules )
Also on site :