Editor’s note: On Tuesday, Feb. 4, 2025, US Customs and Border Protection said most products from China are no longer eligible for the de minimis exemption. The US Postal Service had retailers and shippers scrambling after announcing earlier this week that it would no longer accept packages from China and Hong Kong, but on Wednesday reversed that decision. On Friday, Feb. 7, 2025, President Trump issued an executive order that reinstates de minimis until there are systems in place to collect tariffs on packages that fall under the exemption.
President Donald Trump’s tariffs sent shockwaves through the global e-commerce market by targeting a trade loophole, known as the de minimis exemption, used by Chinese online retail giants.
The tariffs against China, Mexico, and Canada include a provision to eliminate the Section 321 de minimis trade exemption on small packages coming into the US worth less than $800.
In September, the Biden Administration proposed limits on overuse of the de minimis exemption. Officials said the number of shipments claiming the exemption had skyrocketed in recent years, especially from Chinese low-cost e-commerce platforms like Temu and Shein.
According to US Customs and Border Protection, 1.36 billion shipments that entered the US in 2024 claimed the exemption, up from 139 million in 2015.


Clamping down on de minimis, Chinese e-commerce
Section 321 under the US Tariff Act of 1930 allows for de minimis shipments imported by one person per day. Congress raised the waiver from $200 to $800 in 2016 to reduce administrative burdens. The threshold is high compared to other countries.
In 2022, de minimis exemptions made up most of all e-commerce imports by quantity, with China the leading source, according to analysis released by the US International Trade Commission.
“Chinese e-commerce firms have ‘exploited’ the high US de minimis level and minimal inspections to increase US market share,” an analyst reported in 2023.
Ending the loophole would have a major impact on China-linked e-commerce companies like Temu, which is owned by Singapore-based PDD Holdings, and Shein. Industry experts say the fast-growing, low-cost retailers that sell direct to consumers have used the trade exemption to help drive their massive growth.
Temu and Shein combined make up about 17% of the US market for discount goods like fast fashion, toys and consumer goods, according to a Congressional Research Service report.
In announcing tariffs on China, Mexico, and Canada, the Trump administration said it’s trying to stop illegal drugs from coming into the US.
In addition to making it easier for smugglers to ship fentanyl and its precursors into the US, the de minimis provision has been criticized for potentially allowing illegal goods produced by forced labor.
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The impact on consumers + online retailers
Ending de minimis could have the immediate impact of raising prices and delaying shipments for bargain-hunting shoppers. Retailers like Temu and Shein could have a harder time selling to US consumers, which would slow their growth and also lead them to cut back on heavy advertising campaigns on Facebook and elsewhere.
Shein and Temu reportedly have already taken steps to offset elimination of de minimis by expanding their operations in the US, diversifying their supply chains, and shifting to bulk orders.
For example, Shein’s strategy includes a fulfillment and logistics center in the Seattle area, according to a Digital Commerce 360 report.
But experts say lots of companies use the de minimis exemption, making the potential impact of its termination widespread. Amazon reportedly uses de minimis to avoid tariffs on its bargain shopping platform Haul.
Last year, the National Association of Manufacturers joined with other industry groups to oppose the possible elimination of the provision, arguing that it could mean steep price increases for US consumers and businesses by adding red tape and administrative fees for imported goods.
“Eliminating de minimis is the equivalent of a tax hike that would disproportionately impact small business owners and low-income consumers who purchase affordable goods online,” they wrote.

What’s ahead
The Trump tariffs and termination of the de minimis provision were supposed to take effect Tuesday, but on Monday, the White House agreed to pause the Canada and Mexico tariffs for 30 days after talks with leaders of those countries.
Despite the uncertainty, terminating de minimis appears to be a bipartisan effort, so e-commerce businesses should prepare and keep on eye on developments, which are unfolding fast.
After announcing earlier this week that it would no longer accept packages from China, the US Postal Service on Wednesday reversed course.
“The USPS and Customs and Border Protection are working closely together to implement an efficient collection mechanism for the new China tariffs to ensure the least disruption to package delivery,” the service said on its website.
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