President Trump ordered the end of the de minimis policy, which previously allowed foreign retailers to send packages valued under $800 duty-free to the US. The policy previously allowed goods worth under $800 to enter the country without paying duties and without the sender having to complete detailed customs paperwork. However as of Aug 29th, each shipment, no matter the value, will be subject to the tariffs placed on their country of origin.
In May, Trump eliminated the exemption for goods coming from China, which accounted for over 60% of incoming shipments, and on Wednesday, his executive order ended the de minimis exemption for goods from the rest of the world earlier than expected. The One Big Beautiful Bill Act passed by Congress in recent weeks repealed the exemption for all countries in 2027, but President Trump’s order now eliminates the loophole much sooner.
President Trump said that the loophole had been used to “evade tariffs and funnel deadly synthetic opioids as well as other unsafe or below-market products that harm American workers and businesses into the United States.”
American travelers will still be able to bring back up to $200 in personal items and receive gifts valued at up to $100 duty-free, but a fixed tariff rate of between $80 to $200 per item will be applied to many D2C shipments until Trump finishes negotiating trade deals with each country.
A recent study estimated that the cost of eliminating the trade loophole to U.S. consumers could fall between $10.9B and $13B while “disproportionately” hurting “lower-income and minority consumers” who buy a higher percentage of cheap imports. However it did not address the potential positive economic impact of evening the playing field for domestic retailers, who in recent years have had trouble competing with the prices of direct-from-factory foreign retailers that haven’t been subject to taxes.
Either way, consumers should expect near-term price hikes. When Trump ended the de minimis exemption for all imports from China, retailers like Temu and Shein raised prices. A Reuters investigation found that Shein raised prices on hundreds of clothing items in July by about 23%.
