Trump’s tariff plan includes a potential death blow to cheap Chinese e-commerce

In February, the Trump administration moved to get rid of a little-known rule that allows US consumers to avoid tariffs on low-value packages. The de minimis exemption meant that packages valued under $800 could enter the US duty-free, and shoppers — as well as retailers — relied on the exemption regularly, even if they didn’t realize it. Nearly 1.4 billion packages claiming the exemption entered the US in 2024, the majority of which came from China. The removal of this exemption has been paused since early February, meaning Temu and Shein packages have been able to flow into the country without duties. But no longer.

An executive order signed on Wednesday says that packages coming from China and Hong Kong will be subject to tariffs beginning on May 2nd, though the tax structure is slightly different from last time. Under the new plan, packages valued under $800 and sent through the international postal network (think USPS and the like) will get slapped with a fee of 30 percent of the value of the package or $25 per postal item. Other packages (which appears to mean parcels transported by services like DHL) will instead get hit with all the duties they had previously been exempt from: not just baseline tariffs on Chinese packages that Trump has already implemented, but also product-specific duties that could be even higher than 10 or 20 percent. If you are an average consumer buying things from Temu or other retailers that ship directly from China to your US address, the newly assessed fees are likely to be a surprise.

The issue with the plan to end de minimis the first time (which was quickly paused) is that it created chaos in the postal system because the change was so sudden. USPS issued (and then retracted) a statement saying it was suspending all shipments coming from China and Hong Kong, and shoppers immediately began noticing added fees on their purchases they weren’t prepared for. At the time, the White House said it was pausing the end of the exemption until “adequate systems are in place to fully and expediently process and collect tariff revenue.” The new de minimis tariff structure is in some ways more simplified, but still leaves questions about whether the necessary systems are in place to being to process the more than one billion packages.

De minimis packages also are able to enter the US without going through formal inspection, and it’s not immediately clear how Customs and Border Protection would handle the millions of low value packages entering the US everyday. Some studies have estimated that processing de minimis packages would cost the US roughly $3.2 billion a year. The executive order carves out the right to require formal entry (where the content of packages have detailed declarations and are inspected) at CBP’s discretion, but it’s not clear whether all de minimis packages would be inspected at the border. This is significant, because the Trump administration has framed ending the exemption as a method of cracking down on synthetic opioids entering the US — it’s not immediately clear how they would catch illicit drugs coming in if they aren’t opening up packages.

Companies like Shein, Temu, and Amazon Haul depend on de minimis exemptions to help keep costs ultra low, and have shaped their business models around directly shipping to customers in small batches. Additional tariffs will raise costs for consumers in one way or another: some of the taxes could be rolled into the cost of products, or shoppers could be required to pay the fees to get their packages released from carriers.