Trump Slams the Door on China’s Tariff Workaround—’De Minimis’ Loophole Officially Dead

Washington finally plugs the $800-per-package loophole that let Chinese exporters flood US markets tariff-free. Hong Kong’s free ride is over too.

For years, ’de minimis’ shipments—those under $800 in value—slipped through customs without duties. Now, the administration targets what critics called ’China’s backdoor discount channel.’

The move hits e-commerce giants and logistics middlemen hardest. Expect shipping costs to jump—and those ’free delivery’ promises to vanish faster than a crypto bull market.

De minimis tax tenure comes to an end

The term “de minimis,” Latin for “about minimal things,” has existed in US customs law since 1938. It initially eliminated inefficiencies in tax collection, and the value threshold sat at just $1 for decades before rising incrementally to $800 under President Obama in 2016. 

This unusually high threshold compared to international norms, around $40 in Canada and $150 in the European Union, opened doors for small parcel imports.

Chinese retailers used the system by shipping goods directly from manufacturing centers to American consumers, bypassing distribution hubs and domestic tax liabilities. Shein, Temu, and Alibaba’s AliExpress sent everything from $2 blouses to $10 gadgets at speeds and prices that traditional US retailers struggled to match.

American consumers sought these cheap products in mass, which immensely strained border officials, overwhelmed airports, and shipping channels. Port authorities claimed it was also how illegal drugs, including fentanyl, reached the United States. Critics also alleged that some of the goods skirted bans on imports from regions implicated in human rights violations.

De minimis goods now face a 120% tariff

Under the executive order signed by Trump, de minimis shipments from China and Hong Kong are now subject to either a steep 120% tariff or a flat fee starting at $100. That fee will double to $200 on June 1. 

The administration also plans to phase out the exemption for other nations once the US Customs and Border Protection agency finalizes systems to collect duties on incoming small parcels.

The elimination of the de minimis tax doesn’t ban purchases from platforms like Shein or Temu, although goods from the Chinese platforms must now clear customs and incur additional fees, which are being passed on to consumers. 

According to a Bloomberg report on Friday, Temu has begun adding duty charges to select products and has told customers it will take longer delivery times because shipments will use slower sea-based logistics instead of air freight.

Trade talks between the US and China could start 

According to Reuters, Chinese officials may be open to negotiating with the US on tariff issues. A spokesperson for the Ministry of Commerce confirmed that American officials have recently reached out “multiple times” through various channels to initiate discussions. 

Still, Beijing insists that any negotiations must start with the removal of unilateral US tariffs, because their existence is “a sign of bad faith.”

“If the US wants to talk, it should show its sincerity and be prepared to correct its wrong practices,” the spokesperson said in a statement on Friday, according to a CNBC translation.

US Secretary of State Marco Rubio told Fox News’ Hannity on Thursday that “the Chinese want to meet and talk.”

Following the latest developments, the US dollar traded at 7.24275 against the Chinese yuan on Friday, a decline of 0.03560 or 0.49% from the previous trading session. 

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