Trump Closes Key Trade Loophole, Impacting Shein & More

President Trump signed an executive order on Wednesday, July 30, ending the de minimis trade loophole that allows for low value goods to be shipped to the U.S. duty-free. This now means packages valued at $800 or less sent to the U.S. outside of the international postal network will face “all applicable duties,” the White House said. With the trade loophole ending, U.S. consumers will see rising prices, including in once cheaper fashion orders like Shein and Temu. The order takes effect August 29.

USA TODAY reports,

What is de minimis and why will it impact Shein and Temu?

Shein and Temu sell a range of products, including clothing, furniture and more that arrive quickly and cheaply. Over half of all packages with de minimis exemptions come from China, and more than 30% of all daily packages shipped under de minimis are from Temu and Shein, Reuters reported in February. A provision in the Tariff Act of 1930 allows for de minimis exemptions, which has become the primary route for e-commerce imports from China to enter the U.S. According to a congressional report from February, between 2018 and 2023, Chinese exports of low-value, single packages increased dramatically from $5.3 billion to $66 billion.

Eliminating the loophole for China would have “far-reaching negative effects for Americans, particularly poorer consumers,” according to libertarian think tank the Cato Institute.

Republican U.S. Senator Jim Banks of Indiana hailed the executive order, saying “for too long, countries like China have flooded our markets with duty-free, cheap imports.”