Era of cheap Asian goods ends as Trump closes tariff loophole

President Donald Trump’s elimination of the de minimis exemption last week officially ended nearly a century of duty-free imports under $800, marking the conclusion of an era that fueled explosive growth for Chinese e-commerce giants and affordable overseas shopping.

Catch up: De minimis — Latin for “too small” or “of little significance” — allowed merchandise worth $800 or less to enter the U.S. without import taxes. Under the rule, package volumes surged dramatically, climbing from 134 million in 2015 to 1.36 billion in 2024.

Trump first ended the exemption for China and Hong Kong in May, then worldwide through a July 30 executive order that took effect Friday. “For too long, this loophole handed criminal networks a free pass to flood America with fentanyl, fake goods and illegal shipments. Those days are over,” Customs and Border Protection Commissioner Rodney Scott said. The decision accelerated a congressional timeline to eliminate the provision by more than two years.

Consumer impact: The change has triggered confusion and disruption for consumers and businesses globally. Over two dozen jurisdictions, including Taiwan, Japan and several European nations, have halted U.S.-bound shipments while developing new duty payment mechanisms. Shein and Temu, which had built business models leveraging the exemption to avoid billions in duties, reportedly experienced sharp declines in U.S. user engagement following the end of the exemption for China.

U.S. consumers now face new expenses for foreign products. Research shows households could shoulder an additional $10.9 billion in costs, or $136 per family, with lower-income and minority communities experiencing disproportionate impacts. Retailers have also cautioned about extended delivery times, with shipments potentially requiring 20 days versus the standard five to 10 days.

Broader implications: The change especpially affects Asian supply chains and companies that dominated the de minimis marketplace. Chinese shipments represented over 60% of de minimis imports in 2021, while a 2023 House investigation determined that Shein and Temu likely handled more than 30% of all daily packages using the provision. Numerous businesses had also structured Asia-focused distribution networks around the exemption, transporting goods in bulk from Chinese or Southeast Asian manufacturers to Canadian or Mexican warehouses before fulfilling individual U.S. customer orders.

The end of de minimis may favor established American retailers such as Amazon and Walmart over direct Asian competitors, potentially altering distribution patterns for Asian products to U.S. consumers and limiting availability of specialty Asian items that smaller importers previously provided.