On Wednesday, President Donald Trump signed an executive order that eliminates the duty-free exemption for imported goods valued at $800 or less. This significant policy change, effective August 29, aims to halt a long-standing rule that facilitated inexpensive and swift global e-commerce for American consumers.
The new order suspends the de minimis exemption for commercial shipments, meaning companies that depend on low-value imports will now be subject to import duties and increased scrutiny from customs authorities. According to the White House, this move is part of a broader initiative to address issues such as synthetic opioid trafficking, unfair trade practices, and what officials have termed a “catastrophic loophole” detrimental to American workers.
This action follows Trump’s May decision to block duty-free shipments specifically from China and Hong Kong, a policy that had already significantly impacted ultra-low-cost retailers like Shein and Temu. With Wednesday’s directive, the enforcement will now extend to all global shipments.
Understanding the De Minimis Exemption
Historically, the de minimis exemption allowed international retailers to send packages worth less than $800 to the U.S. without incurring import duties. Designed to simplify customs processes and ease the burden on personal orders, this rule became integral to global e-commerce, particularly benefiting direct-to-consumer platforms shipping from Asia.
However, the Trump administration contends that this exemption has been widely misused. According to a White House fact sheet, the policy has been exploited by unscrupulous actors to transport counterfeit goods, hazardous materials, and even narcotics into the country.
Officials highlighted that 90% of all cargo seizures by U.S. Customs and Border Protection (CBP) in the fiscal year 2024 stemmed from de minimis shipments, prompting increased calls for regulatory reform.
Official Statements and Concerns
In the fact sheet released by the White House, officials stated that the executive order is intended to close a “catastrophic loophole” that allows “deadly synthetic opioids and other unsafe products” to enter the U.S. The administration noted, “From 2015 to 2024, the number of de minimis shipments skyrocketed from 134 million to over 1.36 billion.” They also reported that in FY24, 98% of narcotics seizures and 97% of intellectual property seizures were linked to these low-value shipments.
The shift in policy is framed as part of Trump’s emergency declarations aimed at addressing national security threats, economic challenges, and the ongoing drug crisis.
Implications for Retailers and Consumers
Retailers relying on affordable international shipping are likely to experience increased costs and delays, which they may pass on to U.S. consumers. With over 300 million de minimis shipments recorded in the first half of fiscal year 2025, analysts predict widespread disruptions in the importation of inexpensive foreign goods.
The White House has announced a six-month phase-in period for a simplified duty system before transitioning to ad valorem tariffs. Additionally, Trump has enacted legislation that will permanently repeal the de minimis rule by 2027, although this executive order accelerates the timeline for implementation.
