President Donald Trump has temporarily halted his plans to terminate the de minimis trade exemption, a provision widely utilized by Chinese e-commerce giants. On Friday, Trump issued an executive order delaying the closure of this exemption, which allows for duty-free imports of goods valued at less than $800 into the United States. The de minimis trade exemption has significantly contributed to the influx of affordable goods from China, sparking debate over its impact on U.S. trade practices and customs operations.
The de minimis provision, nearly a century old, has become a cornerstone for e-commerce companies shipping low-value goods to the U.S. Without this exemption, goods would be subject to standard import duties and taxes. In 2024 alone, U.S. Customs and Border Protection (CBP) processed over 1.3 billion de minimis shipments. Reports indicate that these shipments are "subject to minimal documentation and inspection," raising concerns over insufficient regulation.
A 2023 report from the House Select Committee on the Chinese Communist Party revealed startling statistics. It found that e-commerce platforms Temu and Shein are "likely responsible" for more than 30% of de minimis shipments entering the U.S., while "likely nearly half" of all such shipments originate from China. Critics argue that this provision offers an unfair competitive edge to Chinese firms, enabling them to flood the American market with inexpensive products.
The Biden administration has proposed measures to curb the "overuse and abuse" of the de minimis trade exemption. A proposed rule aims to enhance CBP's data collection on these shipments, potentially tightening oversight and reducing loopholes exploited by foreign sellers.
Suspension of the trade exemption aligns with Trump's broader tariff strategy, which includes an additional 10% tax on Chinese imports. However, eliminating the de minimis threshold could inundate CBP employees with an unmanageable volume of goods requiring inspection and duty assessments.