Shein, Temu Lose Business as U.S. De Minimis Rule Is Scrapped

President Donald Trump last week suspended a global trade loophole that allowed smaller parcels to enter the U.S. duty-free, cutting off a major channel used by Chinese e-commerce giants Shein and Temu.

Trump has eliminated the so-called “de minimis exemption,” which had allowed goods worth $800 or less to enter the U.S. without paying duties. (Photo: Dick Thomas Johnson Flickr)

Consumers may now bear the cost as these platforms face higher import duties, Ramishah Maruf reported for CNN.

Trump eliminated the so-called “de minimis exemption,” which had allowed goods worth $800 or less to enter the U.S. without paying duties. Retailers had relied on this loophole to ship hundreds of millions of packages from overseas directly to American consumers.

In May, the administration revoked the exemption for goods from China and Hong Kong; the latest executive order expands that to all countries globally.

It also requires packages to clearly declare their country of origin to U.S. Customs and Border Protection (CBP).

In the order issued recently, Trump stated that “many shippers go to great lengths to evade law enforcement and hide illicit substances in imports that go through international commerce."

He added that the risk of “evasion, deception, and illicit-drug importation is particularly high for low-value articles” previously eligible for duty-free treatment.

The policy spells further trouble for Chinese retailers and their customers. It also closes the door on a workaround where goods were routed through third countries like Vietnam, which now faces a 20% tariff rate.