What is the loophole in De Minimus?
Ending the De Minimis loophole means that items under $800 shipped from China will no longer be able to enter US tax-free.
The De Minimis exemption, a trade loophole for low-cost imports, ends on August 29th. This means that the price of items shipped to the US is likely to rise soon.
Under this policy, packages shipped to the US worth less than $800 are not facing additional charges or duties.
President Donald Trump signed an executive order in late July, bringing trade agreements to sunset virtually every country. In 2024, the minimum shipment was valued at over $1.36 billion, according to US Customs and Border Protection.
As a result, consumers could see higher costs and supply disruptions as the Trump administration effectively terminates its tax-free program across the board, experts warn.
Here’s what you need to know about how the end of the De Minimis exemption will affect consumers:
What are the exceptions to de minimis?
De Minimis exemption refers to a policy that allows businesses to ship low-value packages without US customs duties.
Under Section 321 of the Customs Act of 1930, the Treasury Secretary may waive some obligation or fee if it is inconvenient to collect taxes rather than the income is worth.
The Trump administration said customs and border patrols will process more than 4 million minimum shipments daily before an executive order ending the exemption.
Customers from low-value retailers such as Shein and Temu are affected by tariffs as they were closed on May 2nd due to imports from China and Hong Kong. Many companies have shipped most of their products from these locations to the US.
Reuters reported in February that over 30% of all daily packages shipped under the then deminisith were from Temu and Shein.
How will the end of De Minimis affect consumers?
Ernie Tedesci, director of economics at Yale Budget Lab, previously told USA Today that prices at well-known stores such as Target, Walmart and Costco would not be affected by the end of the Deminimis.
“These stores are already experiencing increased tariffs and should be incorporated into those prices at this time,” he said.
Tedeschi said the end of De Minimis could affect health and beauty items, apparel, household items, and a variety of bespoke or boutique items imported.
But shoppers could be confused about availability or stock before they notice price increases, Tedeski said. He put the administration on hold on orders after more than a million packages at John F. Kennedy International Airport in New York, pointing to a package stake as Trump was first trying to end the exemption.
“It’s not clear to me that the administration has yet to resolve the issue,” Tedeski said. “It all means that the initial effect consumers are seeing may not be price increases at least initially. That may mean that there are no products that have come from de Minimis previously.”
Melina Kahn is a national trending reporter for USA Today. She can be contacted at melina.khan@usatoday.com.
Kathryn Palmer is a national trending news reporter for USA Today. You can contact her kapalmer@usatoday.com And with x @Kathrynplmr.
