The trade provision that allows consumers and resellers to avoid duties on shipments worth $800 or less is ending for products made in China.
The Wall Street Journal reports E-Commerce Sellers Brace for End of De Minimis
The so-called de minimis provision that exempts packages of $800 or less from duties is scheduled to end at just after midnight Eastern time on Friday for goods made in China and Hong Kong, after President Trump in early April ordered the end of the policy.
The change will leave most shipments subject to the new 145% base tariff on all Chinese products, as well as additional levies based on the nature of the products. Steep fees on packages shipped via the international postal network—as opposed to carriers such as FedEx or United Parcel Service—kick in at the same time.
Use of the de minimis provision has skyrocketed in recent years with a surge of goods from bargain sites Shein and Temu, both of which already have been raising prices ahead of the exemption’s end. About 1.36 billion shipments using the de minimis provision entered the U.S. in fiscal year 2024, up from 637 million four years earlier, according to U.S. Customs and Border Protection.
Other e-commerce sellers say they can’t afford the steep tariffs due to be levied on their merchandise. More than 80% of executives said eliminating de minimis would threaten their company’s survival in a survey earlier this year conducted by retail analysis firm Wakefield Research and logistics company Swap Commerce.
Companies are “thinking about this in existential terms,” said Juan Pellerano-Rendón, chief marketing officer at Swap. “Everyone’s trying to use different tactics, but at the end of the day, I don’t think that any brand can wholly absorb these changes to de minimis.”
A $175 pair of athletic sneakers made in China of synthetic materials shipped directly to a U.S. customer from Kuru’s Canadian warehouse would be liable for more than $300 in tariffs, said Matt Barnes, the company’s chief financial officer.
“The margin is so negative at that point there is absolutely no point in considering fulfillment from Canada” for goods made in China, Barnes said.
China-founded discount retailers Shein and Temu have been among the biggest beneficiaries of the de minimis exemption, which has helped the companies sell goods at prices far below rivals such as Amazon.com.
The two companies started raising prices last week. Some products on the sites are 40% to 100% more expensive than last week, according to Geekbi, an e-commerce pricing and sales tracker.
Hooray!? 40% to 100% Higher Prices
Who wants that? (Exclusions for cultist parrots who cannot think).
The idea we are going to bring shoe or clothes manufacturing back to the US (or that we would like the price result if we did) is of course ludicrous.
But let’s assume for a second we did bring shoe manufacturing to the US.
Q: Will the US ever be able to compete with China or Vietnam on shoes or clothing exports?
A: Of course not.
It’s doubtful the US can even produce as good a shoe. All we will have achieved is making US citizens pay more to get less.
Republicans Against Trump
GOP Senator Rand Paul: “Tariffs don’t punish foreign governments. They punish American families. When we tax imports, we raise the price of everything—from groceries to smartphones to washing machines to prescription drugs.”
Rand Paul for President anyone? Count me in.
Trump’s Plan to Make Manufacturing Great Again
For discussion of the absurdity of this setup, please see Trump’s Plan to Make Manufacturing Great Again in Pictures
Contrary to popular myth, neither NAFTA nor China entering the WTO impacted long-term trends in manufacturing employment in place since 1953.