The exemption, which will be disallowed in late August, has long been exploited by importers to avoid duties and customs inspections.
The end is in sight for a much-abused trade exemption. On Wednesday President Trump, via executive order (EO), announced he is closing the de minimis loophole, which allows goods valued less than $800 to be imported into the country duty free and with minimal customs inspections. It will take effect in late August.
This is the loophole that juiced Amazon and gave rise to fast fashion behemoths like SHEIN and Temu, who could send ultra-cheap items made in foreign factories directly to American consumers. That may have made online shopping easier on wallets but it has come at a significant cost to sustainability and labor rights. It opened an avenue for unfairly traded imports to undercut American manufacturing workers, and introduced legitimate concerns about drug smuggling that such a light customs touch has invited.
As an article in Fast Company put it thusly last fall: No sofa should cost $20.
Anyway: This expands on an EO Trump signed earlier this year that ended the exemption from de minimis shipments from China and Hong Kong; as of August 29, it will apply to de minimis shipments from all countries. It also speeds up the end to the exemption that passed as part of the budget reconciliation package earlier this month, which ended de minimis treatment for commercial packages but would not have taken effect until July 2027.
What’s more, it’s the culmination of long and bipartisan efforts to reform de minimis, the most recent of which was the Closing the De Minimis Loophole Act put forward by Sens. Sheldon Whitehouse (D-R.I.) and Lindsey Graham (R-S.C.) this spring and by Rep. Linda Sanchez (D-Calif.), who first introduced its companion bill in the House of Representatives.
The Alliance for American Manufacturing (AAM) has long banged the drum for reform here too. For some time we’ve been a part of the Coalition to Close the De Minimis Loophole, which as recently as last week called on President Trump to end de minimis immediately.
As such, we are pleased the president has taken this step on de minimis. But now’s not the time to take our foot off the gas. There are more improvements to U.S. trade enforcement that should be made. Said AAM President Scott Paul:
“Closure of the de minimis loophole is an important step forward, but there’s still more work to be done in leveling the playing field for U.S. manufacturers. Now the White House and Congress must both focus their efforts on fully enforcing U.S. trade law and prosecuting trade crime violations. Bipartisan bills like the Protecting American Industry and Labor from International Trade Crimes Act and the Leveling the Playing Field Act 2.0 will help achieve these goals.”