Trump's De Minimis Loophole Closure to Hit 1.3 Billion Parcels, Amazon's Temu and Shein Among Affected Sellers

President Donald Trump has eliminated the global "de minimis exemption" for packages worth $800 or less entering the US, affecting 1.36 billion packages annually. This change targets Chinese e-commerce platforms, including Temu, Shein, and Amazon marketplace sellers. Temu's US daily users dropped 58% in May after the initial China-specific de minimis suspension, and PDD Holdings reported a 36% decline in operating profit to $2.52 billion. The new tariff structure will impact consumer costs, with companies facing ad valorem duties based on origin country tariff rates or flat fees ranging $80-$200 per item.

President Donald Trump has taken decisive action to protect American national security and economy by suspending the global de minimis exemption for commercial shipments valued at $800 or less. This move, effective August 29, 2025, closes a significant loophole exploited by shippers to evade tariffs and smuggle illicit substances into the United States [1].

The executive order, signed by President Trump, aims to address escalating deceptive shipping practices and the influx of dangerous and substandard products. Between 2015 and 2024, the volume of de minimis shipments entering the U.S. increased from 134 million to over 1.36 billion, with over 4 million shipments processed daily [1]. This suspension will impact millions of packages, particularly those from China, which accounted for a majority of de minimis shipments [2].

The new tariff structure will affect consumer costs. Goods shipped through international postal systems will be subject to ad valorem duties based on the origin country's tariff rate or specific duties ranging from $80 to $200 per item, depending on the effective tariff rate [1]. This change will impact Chinese e-commerce platforms like Shein and Temu, which have been exploiting the de minimis exemption to ship goods duty-free [2].

The suspension of the de minimis exemption has already led to significant changes in pricing and shipping models. For instance, Temu, a Chinese e-commerce platform, announced it would send American orders via US-based distributors to comply with the new rules. However, this change has resulted in higher prices and out-of-stock items for some consumers [2]. The new tariffs will also affect Amazon Haul, a discount competitor to Temu and TikTok Shop [2].

Lower-income households are expected to be most affected by the higher prices on Chinese e-commerce sites. According to research, 48% of de minimis packages were shipped to America's poorest zip codes, while 22% were delivered to the richest ones [2]. The Trump administration had previously slashed the de minimis exemption on China in May, leading to a 58% drop in Temu's US daily users [2].

The suspension of the de minimis exemption is part of a broader effort to combat harmful trade loopholes. In February, President Trump declared national emergencies on the United States’ northern and southern borders, including the public health crisis caused by fentanyl and other illicit drugs [1]. The One Big Beautiful Bill Act, which permanently repeals the statutory basis for the de minimis exemption worldwide, is scheduled to take effect on July 1, 2027 [1].

References:
[1] https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-president-donald-j-trump-is-protecting-the-united-states-national-security-and-economy-by-suspending-the-de-minimis-exemption-for-commercial-shipments-globally/
[2] https://finance.yahoo.com/news/shein-temu-prices-hit-even-080042021.html