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Is your Temu purchase about to get more expensive?
Low-price online retailers like Temu and Shein have been using a trade provision (available since the 1930s) to help them grow in the U.S.—and offer lower prices than States-based competitors.
However, on Saturday, when President Trump signed an executive order (EO) that puts tariffs and taxes on goods and energy imported from China, Mexico (now paused), and Canada starting Tuesday, it will also end a lesser-known but widely used exemption known as “de minimis,” a provision that allows packages worth less than $800 to be shipped to the U.S. duty-free.
The loophole has helped companies like Temu and Shein offer extra low prices on goods and has fueled their rapid growth in the U.S. Bloomberg reports that the two companies have been anticipating the news for a year and have been expanding their shipping networks stateside.
Still, CNBC reports that Trump’s actions could help companies including Amazon, Etsy, and eBay becasue their platforms let third-party sellers connect to U.S. consumers directly.
What is the ‘de minimis’ provision?
The de minimis provision has existed since the 1930s, but its use has exploded in recent years with the rise of e-commerce.
The provision allows packages worth less than $800 to be sent to the U.S. duty-free.
According to data from the U.S. Customs and Border Protection Agency, the U.S. processed more than 1.3 billion de minimis shipments in 2024 (it was only 139 million in 2015) worth more than $48 billion.
Last fall, the Biden administration looked to stop the “overuse and abuse” of de minimis, per CNBC, noting the loophole helps Chinese e-commerce companies offer lower prices than companies stateside.
“The drastic increase in de minimis shipments has made it increasingly difficult to target and block illegal or unsafe shipments coming into the U.S.,” Daleep Singh, a then deputy national security advisor for international economics, said in September.
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