The U.S. government has successfully collected $1 billion in de minimis tariff revenue since it rolled back an exemption on low-value packages earlier this spring. In May, President Donald Trump took an essential step. For instance, by closing a loophole that exempted goods worth less than $800 from China and Hong Kong from tariffs, he generated a lavish financial reward. In addition, the exemption created a wave of American consumers. They rushed to Chinese e-commerce juggernauts Temu, Shein, Alibaba.
Back in August, before widening the closure to cover all countries, U.S. Customs and Border Protection (CBP) announced an unprecedented flood of packages. On the average day, a million packages came into the country. After expanding the tariff policy across all low-value exports, the CBP reported an astounding 82% increase in seized unsafe and non-compliant goods. That amazing 336% increase is a testament to the success of their new strategy.
“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.
The new effective tariff rates are between 10% and 50%, depending on the country of origin. This change, made under the federal preemption provisions, has severely limited competition from both more established and emerging companies and harm individual American consumers as well. Many consumers are unaware that they may be responsible for paying duties on their packages. This frequently occurs when shippers fail to account for these expenses when pricing goods.
Since the enactment of these tariffs, nearly half of de minimis packages have been routed to America’s poorest zip codes. In stark contrast, just under 22% have made it to the wealthiest neighborhoods. This change in the mode of revenue collection happens at the same time as Trump’s implementation of the International Emergency Economic Powers Act. That act has been a primary vehicle for imposing new tariffs during his second term.
The government has collected hundreds of millions more in tariff revenue since closing the loophole. This policy shift has introduced significant unintended consequences. Should a court ultimately invalidate Trump’s actions, thousands of U.S. importers would be entitled to refunds. That actually includes individual American consumers who’ve incurred duties while receiving low-value packages.