President Trump’s new round of tariffs on China this week also came with a major shake-up in trade policy: the suspension of the de minimis provision for Chinese imports. This decades-old rule allowed companies to bypass import duties and customs scrutiny on small shipments under $800 in value. The immediate fallout saw the U.S. Postal Service briefly halting packages from China and Hong Kong before resuming limited acceptance.
The de minimis exemption has fueled the rapid rise of low-cost e-commerce platforms like Shein and Temu, which ship millions of packages directly to American consumers. But critics argue the policy has undermined domestic businesses, allowed subpar and even illicit goods into the U.S., and provided a backdoor for Chinese firms to sidestep trade restrictions.
The De Minimis Loophole
Originally designed to allow travelers to bring home souvenirs without excessive taxation, the de minimis provision has morphed into a critical advantage for e-commerce giants. Since Congress raised the threshold from $200 to $800 in 2016, its usage has skyrocketed. In 2024, U.S. Customs and Border Protection recorded 1.36 billion shipments under de minimis, more than doubling from four years prior.
Retail analysts estimate that 75% of de minimis imports come from China. Platforms like Shein and Temu have leveraged the provision to ship individual items directly to customers rather than importing bulk goods and paying tariffs like traditional retailers.
The Backlash Against De Minimis
Some lawmakers have long scrutinized de minimis for facilitating unfair competition. While U.S. manufacturers pay import duties of up to 25% on Chinese goods, Chinese sellers using de minimis could ship products duty-free. Small business owners have decried the loophole for undercutting their pricing, while U.S. Customs officials warn it enables the influx of counterfeit and unsafe products, including those made with forced labor in China’s Xinjiang region.
What Trump’s Executive Order Means
Trump’s latest move suspends de minimis for imports from China, meaning all shipments—regardless of value—will now be subject to tariffs, documentation, and inspections. Some legal experts predict potential court challenges, but the administration argues that national security and trade fairness justify the move.
Impact on Shein, Temu, and U.S. Consumers
Shein and Temu have relied heavily on de minimis, but the effect may not be uniform. Temu has already begun shifting its logistics, with over a third of its U.S. orders now coming from domestic warehouses. Shein, however, remains deeply dependent on direct shipments from China and may face serious disruptions.
Winners and Losers
Amazon, which recently launched a Temu-style marketplace called “Amazon Haul,” may gain a competitive edge as Chinese rivals face new hurdles. Meanwhile, U.S. manufacturers who have long struggled against unfair pricing may finally get some relief.
For American consumers, the end of de minimis for China could mean fewer ultra-cheap products, but it also aligns with Trump’s broader push to bring manufacturing back to the U.S and encourage consumers to buy more from US based companies. Whether this policy ultimately benefits or burdens shoppers remains to be seen.