Starting August 29, a trade rule that allowed low-value packages to enter the United States without duties will officially end. The decision follows an executive order signed by President Donald Trump.
The policy, known as the “de minimis” exemption, previously allowed shipments valued at $800 or less to bypass import taxes if they arrived outside the international postal system. This exemption has been widely used by fast fashion giants Shein and Temu, who ship large volumes of inexpensive goods directly from China to American consumers.
Impact on Chinese E-Commerce Shipments
With the rule ending, all such packages will now face “all applicable duties,” according to the White House announcement in July. Lawmakers backing the change argue it closes a loophole that has given companies shipping from China an unfair advantage. Senator Jim Banks of Indiana called the measure “about protecting American markets from cheap, duty-free imports.”
More than half of all de minimis shipments come from China, with Shein and Temu accounting for over 30% of the daily volume. Between 2018 and 2023, the total value of low-cost imports from China jumped from $5.3 billion to $66 billion, fueled by the popularity of fast, low-cost online shopping.
Shoppers in the US have enjoyed ultra-low prices and free shipping through platforms like Shein and Temu, but those benefits may now shrink. Both companies announced earlier this year that prices would rise in response to the change, although neither specified how much. Some customers have already noticed slight increases on common items.
This adjustment is expected to hit lower-income shoppers hardest. The Cato Institute, a libertarian think tank, warned that removing the de minimis rule could have “far-reaching negative effects,” especially for households that depend on affordable goods.
Supporters See It as a Long-Overdue Move
Supporters of the policy shift say it is necessary to level the playing field for American businesses that have long been subject to import duties. By forcing companies like Shein and Temu to pay the same taxes, they argue domestic businesses will no longer be undercut by foreign firms exploiting the exemption.
As the deadline approaches, some consumers are rushing to stock up before the rule kicks in, while others are beginning to explore alternative online retailers for bargains.
What The Author Thinks
This rule change might feel like a protectionist measure, but it does address an imbalance that’s been building for years. Companies like Shein and Temu have undeniably made fashion and goods more accessible, but they’ve also leaned heavily on loopholes that undercut US businesses. Closing the gap makes sense for fairness, yet it risks punishing the very people who needed the low-cost options most. The long-term challenge will be finding a balance between fair trade and affordability so everyday shoppers don’t pay the highest price.
Featured image credit: Heute
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