Axing De Minimis Loophole To Make Temu, Shein Products More Expensive

President Donald Trump’s tariffs could drive up the cost of cheap Chinese goods—not just because of the tariffs themselves but also due to changes in import tax policies, Forbes reporter Danielle Chemtob wrote.

Low-cost retailers like Temu and Shein heavily rely on the exemption that allows packages valued at $800 or less to enter the U.S. tax-free. I Photo: Focal Foto Flickr

Trump recently imposed a 10% tariff on Chinese imports, prompting swift retaliation from Beijing, which announced additional taxes on U.S. goods. Meanwhile, planned 25% tariffs on Mexican and Canadian imports have been delayed by one month.

Also in the administration’s crosshairs is the “de minimis” trade provision, which allows packages valued at $800 or less to enter the U.S. tax-free. Low-cost retailers like Temu and Shein heavily rely on this exemption.

In 2024, the U.S. processed over 1.3 billion de minimis shipments. By late 2023, bipartisan support in Congress had emerged for reforming the loophole, which critics argue gives foreign retailers an unfair advantage.

The Biden administration had previously proposed closing the exemption, and Trump's new tariffs could accelerate efforts to eliminate it entirely.