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.
A few days after the major trade loopholes were closed, e-commerce platform Temu overhauled its business model by halting shipments of Chinese-made goods to US customers.
Instead of offering American consumers a large amount of discounted products from China, the company is currently selling products shipped from US-based warehouses.
Online marketplaces can keep product prices low and avoid the costs associated with outsourced products. Temu said these items are not subject to custom fees, import fees or taxes collected by the country’s custom authorities.
The move comes just days after the US placed sharp tariffs on imports from China and after the expiration of the Deminimis exemption.
According to Reuters, President Donald Trump initially closed the De Minimis loophole in February, but postponed the postponed execution after starting to pile up without time to plan and implement policy changes.
“Temu’s pricing for US consumers remains unchanged as the platform moves to a local satisfying model,” the company said in a statement to USA Today. “All sales in the US are now processed by local sellers and orders from within the country are fulfilled.”
This is what shoppers need to know.
Meaning of Temu’s “Local Warehouse” banner
American customers can avoid custom and import charges by shopping through Temu’s “Local Warehouse” section.
According to a banner found on Temu’s website, all products with the “local warehouse” tag will be shipped from “from your country or region, so no import or additional delivery fees will be applied at the time of purchase.
The company did not immediately respond to USA Today’s request for clarification on whether the capabilities of US manufacturers could affect product availability.
Temu also “actively recruits US sellers to join the platform” to help local merchants reach more customers and grow their businesses.
Temu and competitor Shein warned customers of potential price increases in late April after the tariff war began between the US and other countries, particularly China.
Contributed by: USA Today, Kinsey Crowley