Since the United States government rolled back that exemption on low-value packages, it has collected a stunning $1 billion in de minimis tariff revenue. This monumental step increases tariff revenue while hardening border security across the nation. The current administration President Donald Trump was the one to make this policy shift. It shut down the loophole that had permitted merchandise worth under $800 to come into the country duty-free.
Originally, the exemption had applied only to products brought into the country from China, Hong Kong – a move adopted in May 2023. It was subsequently broadened to cover all low-value exports from all countries. This closure of the loophole largely removes a revenue raising focus for the federal government. Simultaneously, it prevents illicit goods and drugs from reaching the US.
In defense of the changes, Trump made the case that such a move was crucial to national security and economic stability. In a bid to reinforce these claims, he stated that closing the loophole would enable the government to generate significant tariff revenue. The measure has already worked wonders. In late August, that number reached an average of one million packages per day coming into the country before the exemption was fully implemented around the world.
Customs and Border Protection (CBP) is raising the bar. They have begun to subject packages to more intensive inspections in the process of enforcing this new policy. Since the closure of the loophole for goods from China and Hong Kong, CBP reported an 82% increase in seizures of unsafe and non-compliant low-value goods.
“Seizures of unsafe and non-compliant low-value goods have increased by 82%. These included counterfeits, narcotics, faulty electronics, and goods containing hazardous chemicals.” – CBP
This surge in seizures is a welcome sign that there is increased attention being paid to ensuring that these low-value imports are not circumventing safety and compliance standards. This policy has a profound effect on all socioeconomic classes. Nearly half of de minimis packages – 47% – are likely shipped to America’s poorest zip codes, and only 22% go to the richest.
Nonetheless, the tariff rates are steeply regressive depending on the country of origin, with a 10% tariff for some countries and a 50% tariff for others. In certain cases, a set fee of $80 to $200 can be used rather than a standard tariff. That flat fee is going to expire in February of next year, which is likely to lead to even more changes in the way we import.
We must admit that President Trump had the power to impose these tariffs. He argued that these measures are now more important than ever for protecting American interests. The de minimis loophole’s closure represents a step beyond the perennial tinkering of U. This amendment is part of a larger movement to increase control of international trade and protect domestic markets.