The Journal. A Tariff Loophole Just Closed. What That Means for Online Shopping.
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May 2, 2025 A significant trade provision is ending, set to impact e-commerce and consumer prices drastically. The removal of the de minimis exemption means online retailers could face hefty duties, potentially raising costs for shoppers. Major players like Shein and Temu are adapting to this shift while grappling with stricter customs regulations. Moreover, small retailers, including a shoe company, may face existential challenges as they reassess their pricing strategies and manufacturing operations amidst the evolving tariff landscape.
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De Minimis Exemption Basics
- De minimis is a trade provision that exempts low-value goods (under $800) from import taxes in the U.S.
- The exemption was designed mainly for travelers to avoid taxing small imports, but has ballooned due to e-commerce.
De Minimis Growth and Scrutiny
- De minimis shipments to the U.S. more than doubled from 637 million to 1.4 billion in 4 years.
- The exemption became popular as a way to avoid paying taxes on low-cost imports, attracting government scrutiny.
Reason for Ending De Minimis
- Trump ended the de minimis exemption for China, Hong Kong, and others citing it as a loophole aiding drug smuggling.
- The main goal is to reduce fentanyl entering the U.S., declared a national emergency by Trump.