Trump Ends De Minimis Trade Loophole, Shein and Temu Orders to Face Import Duties

U.S. Ends Duty-Free Trade Loophole, Impacting Shein and Temu Shoppers

President Donald Trump has signed an executive order that will close the long-standing “de minimis” trade loophole, ending the duty-free import of low-value goods into the United States. This change, effective from August 29, is expected to significantly affect consumers who frequently shop from fast fashion giants Shein and Temu.

Under the previous de minimis rule, individual packages valued at $800 or less could enter the U.S. without incurring import duties, provided they arrived outside the international postal system. The new executive order mandates that all such goods will now be subject to “all applicable duties.”

The White House stated that this move aims to close a loophole exploited by foreign sellers, particularly from China. More than 50% of all de minimis shipments originate from China, with Shein and Temu accounting for over 30% of daily package imports under this exemption, according to a February Reuters report.

These platforms have gained popularity by offering low-cost products like apparel, electronics, and household items, often with free shipping. But with the end of duty-free privileges, shoppers may now see higher prices at checkout.

The de minimis exemption was originally part of the Tariff Act of 1930 and became a key entry point for e-commerce imports from China. A congressional report highlighted the surge in Chinese exports through this method—from $5.3 billion in 2018 to $66 billion in 2023.

While critics warn that eliminating the loophole could raise prices for low-income consumers, supporters argue it’s a necessary step to level the playing field for American businesses. Republican Senator Jim Banks of Indiana praised the order, saying it finally holds countries like China accountable for overwhelming the U.S. market with cheap, duty-free imports.