Federal court confirms end of de minimis exemption
The U.S. Court of International Trade has upheld an executive order to eliminate an exemption on duties and taxes for select import shipments.
On Friday, Aug. 29, President Trump’s executive order globally ended the availability of the de minimis exemption, which eliminated duties and taxes on imported shipments with an aggregate value of less than $800. It also allowed them to enter the U.S. while revealing less information about the contents than other imported shipments.
The exemption was widely leveraged in the retail industry, especially by global online retailers such as Shein and Temu that specialize in extremely low-priced apparel and other goods.
[READ MORE: Trump ends tariff loophole for low-cost shipments]
Michigan-based auto parts distributor Detroit Axle had filed a lawsuit against the Trump administration arguing that it did not have authority under the International Emergency Economic Powers Act, or IEEPA, to revoke the de minimis exemption.
Trump had used IEEPA as the legal basis for the sweeping “reciprocal tariffs” he issued in April 2025. In February 2026, the U.S. Supreme Court ruled that IEEPA does not give the Trump Administration the authority to unilaterally impose tariffs on imported products.
In April 2026, U.S. Customs and Border opened a digital portal allowing businesses affected by tariffs unilaterally set under IEEPA to apply for refunds, following an order from the U.S. Court of International Trade.
However, the U.S. Court of International Trade ruled in favor of the Trump administration in the Detroit Axle lawsuit, stating in its findings that unlike the previous tariffs, the de minimis closure does not require congressional approval so does not pose any issues with the constitutional requirement for separation of powers.
As a result of this ruling, shipments will continue incurring charges that range from 10% to 50% of their declared value. Previously, the de minimis exemption had been scheduled to expire globally in July 2027. Detroit Axle did not respond to a request for comment from CNBC.
De minimis exemption attention began with Biden
According to an official White House fact sheet released in September 2024 (during the Biden administration), from 2014-2024, the number of shipments entering the U.S. claiming the de minimis exemption grew from roughly 140 million per year to more than one billion per year, largely originating from "several China-founded e-commerce platforms."
As part of his tariff policy, Trump had previously specifically excluded Chinese imports from the de minimis exemption. This significantly impacted low-cost shopping apps that rely on Chinese imports, such as Temu and Shein.
Responses from those companies included Temu restricting sales in the U.S. to sellers that are based in and ship from the country and Shein increasing U.S. prices to offset the price impact.
U.S. adults were spending an extra $12.2 billion each month, averaging $47 more per person monthly following new tariffs on Chinese goods, according to a 2025 survey by email and SMS marketing platform Omnisend.
