The Trump administration’s closure of a duty-free route for some low-value imports marked a significant change for online retail platforms that had built U.S. sales around direct shipping from China and Hong Kong.
The affected trade rule, commonly called the de minimis exemption, had allowed parcels valued at less than $800 to enter the United States without duties or import taxes. According to the BBC, Temu and Shein had been among the Chinese-linked online retailers that benefited from the arrangement, using it to support very low prices on goods shipped directly to American consumers.
Temu responded by saying it would no longer sell goods imported from China directly to U.S. customers through its platform. The marketplace said its U.S. sales would instead be handled by locally based sellers, with orders fulfilled from within the country. Temu also said it had been recruiting U.S. firms to join the platform and described the change as a way to help local merchants reach more buyers.
The policy change followed earlier signs of strain for low-cost online sellers. In the previous month, Shein and Temu issued almost identical statements saying their operating costs had increased because of recent changes in trade rules and tariffs, and that they would make price adjustments from 25 April. Shein did not immediately respond to the BBC’s request for comment.
The exemption has long been defended as a way to simplify customs handling for inexpensive parcels. It dates to a U.S. trade rule enacted by Congress in 1938, intended to avoid the cost of collecting small import levies. Over time, the threshold rose, and the rule became a major channel for e-commerce shipments. The BBC reported that shipments using the exemption made up more than 90% of all cargo entering the United States, citing U.S. Customs and Border Protection.
The Trump administration tied the latest move to efforts against illegal synthetic opioids such as fentanyl. The executive order cited by the BBC said some Chinese shippers used deceptive methods to conceal illicit substances in low-value packages and exploit the exemption. It also said fentanyl was linked to 75,000 deaths per year.
The idea of tightening the rule was not limited to the Trump administration. The Biden administration had proposed measures in the previous year aimed at curbing abuse of the exemption, saying the expanding volume of small parcels made it harder to identify illegal or unsafe shipments.
The practical burden on importers also increased sharply. Packages from mainland China and Hong Kong valued up to $800 became subject to a 120% tax rate or a flat fee that began at $100 and was scheduled to rise to $200 at the beginning of June.
The change drew concern over consumer prices and customs capacity. The American Action Forum estimated that eliminating the exemption could create $8bn to $30bn in added annual costs that would ultimately reach consumers. The National Foreign Trade Council warned that ending the exemption could divert Customs and Border Protection attention from other enforcement priorities, including the southern border.
