Trump eliminates tariff exemption used by low-cost shopping apps

Chinese tariffs have closed an import loophole.

The new tariff President Trump has placed on Chinese imports also closes a loophole that has exempted lower-value goods from duties and taxes.

As part of the recent executive order issued by Trump which placed a 10% tariff on imports from China beginning Tuesday, Feb. 4, no shipments from China will be eligible for the de minimis exception, which exempts imported shipments with an aggregate value of less than $800 from having to pay tariffs.

The exception also allows these shipments to enter the U.S. while revealing less information about the contents than other imported shipments.

According to an official White House fact sheet, during the last 10 years, the number of shipments entering the U.S. claiming the de minimis exemption has grown from roughly 140 million per year to more than one billion per year, largely originating from “several China-founded e-commerce platforms.”

Two of the most popular e-commerce platforms largely selling imported Chinese goods to U.S. consumers are Shein and Temu. While Shein is based in Singapore and Temu has headquarters in Boston, both have close ties with vendors on the Chinese mainland. Both companies have been able to expand their market share largely by exporting goods into the United States without being subject to duties, according to the New York Times.

CNBC previously reported that Shein and Temu paid no import duties in 2022 due to de minimis exemption claims, and a 2023 report from the House Select Committee on the Chinese Communist Party found that the two companies likely generate almost half of all de minimis shipments to the U.S. from China.

Trump’s executive order builds on an executive order issued by President Biden in September 2024. The Biden administration used executive authority to exclude from the de minimis exemption all shipments containing products covered by tariffs imposed under Sections 201 or 301 of the Trade Act of 1974, or Section 232 of the Trade Expansion Act of 1962.

Section 301 tariffs cover approximately 40% of U.S. imports, including 70% of textile and apparel imports from China. The Biden administration also asked Congress to pass legislation to reform the de minimis exemption.

In commentary emailed to Chain Store Age at the time of the Biden order, a Temu spokesperson said the company is not reliant on de minimis exemptions for its success in the U.S.

"Since Temu's launch in September 2022, our mission has been to offer consumers a wider selection of quality products at affordable prices," the spokesperson said. "We achieve this through an efficient business model that cuts out unnecessary middlemen, allowing us to pass savings directly to our customers. Temu's growth does not depend on the de minimis policy. We are reviewing the new rule proposals and remain committed to delivering value to consumers."

The elimination of the de minimis exemption for Chinese shipments could also have an impact on Amazon Haul, a new dedicated section of Amazon’s U.S. e-commerce site and shopping app that offers fashion, home, lifestyle, electronics, and other products with what the e-tailer describes as "ultra-low" prices of $20 and under, and with typical delivery times of one to two weeks.

While nothing in Amazon’s announcement of Amazon Haul specifies where products sold via the storefront will originate from, media reports indicated that in a June meeting with select sellers of Chinese products Amazon said it would launch a discount storefront featuring their merchandise.