May 2, 2025 (Bloomberg) –Small-value packages shipped to the US from China will no longer be exempted from tariffs starting Friday, when President Donald Trump’s move against an exception he called a “big scam” takes effect.
The decision to end the so-called “de minimis” exception is expected to havewide-ranging effectson American consumers who have increasingly purchased cheap clothing, household goods and other products from discount Chinese marketplaces such as Temu and Shein Group Ltd. It could also deal aheavy blowto independent online sellers who rely on Chinese imports.
Temu said Friday it would abandon a model centered on cheap Chinese imports that catapulted it to success in the US, shifting instead to what it calls “local fulfillment” by recruiting US merchants to sell locally based merchandise. That’s expected to allow it to sidestep tariffs, and the PDD Holdings Inc. unit said in an emailed statement that it intends to keep prices for Americans unchanged.
Trump last month signed an executive order closing a loophole that has allowed items from China and Hong Kong valued at no more than $800 to enter the US without customs declarations and import duties. The Trump administration has said it’s taking aim at the de minimis exception because it could be exploited to send ingredients used to make illicit fentanyl into the US while avoiding detection by authorities.
The US president also said the exemption has benefited Chinese e—commerce shopping platforms at the expense of US mom-and-pop retailers.
Read more:What’s the De Minimis Tariff Loophole Trump Closed?: QuickTake
“De minimis. It’s very — it’s a big deal. It’s a big scam going on against our country, against, really, small businesses and we’ve ended it,” Trump said Wednesday during a cabinet meeting.
Packages from China and Hong Kong will now be taxed at a rate of 120% of their value or charged a flat rate. That fee starts at $100 and is set to increase to $200 on June 1. While Americans can still buy goods from places such as Temu and Shein, their costs will likely increase as retailers hike prices ahead of the tariffs.
The change takes hold as Americans growincreasingly skepticalof Trump’s economic agenda and tariff program. A disruption of shopping patterns could put further pressure on the White House to broker a deal with China to bring down trade barriers.
Trump hasacknowledgedin recent days that American consumers are facing a new landscape due to his tariffs, saying that children may have “two dolls instead of 30 dolls” to pick from on store shelves and “maybe the two dolls will cost a couple of bucks more than they would normally.”
Read More:Temu Ditches Chinese Imports Model to Avoid Trump’s Tariffs
Shein has raised prices on products, from dresses to kitchenware, ahead of the new tariffs. As of Friday, the average price for the top 100 products in the beauty and health category increased by 51%, with several of the items more than doubling in price. As of last week, Temu also had appeared to be passing all of the taxes on to consumers by adding a clearly labeled surcharge for buyers at checkout.
The de minimis exemption, which dates back to 1938, is higher in the US than in other countries. It’s about $40 in Canada and about $150 in the Euro area. Around 4 million small packages claiming the exemption entered the US each day in 2024.
More than 1 billion individual shipments to the US a year claim the exemption, up from around 140 million a decade earlier, according to a 2024 White House fact sheet.
De minimis packages from places other than mainland China and Hong Kong are poised to lose their tariff exemption too once a system to “expeditiously process and collect” the duties is in place, according to anexecutive orderissued by Trump.
Read more:Trump’s Trade War and the Economic Impact: Tariff Tracker
DHL Group Chief Executive Officer Tobias Meyer said Wednesday that the impact of the de minimis change on the Bonn, Germany-based logistics company is uncertain and depends on how the “fine print” is implemented. In particular, he said, it matters how “formal versus informal customs clearances are defined.”
“For us it makes a big difference because for a formal clearance into the United States, you need additional data items,” Meyer told Bloomberg Television on Wednesday, adding that companies are wondering if new forms will be needed for smaller packages.
