The following is a report from Yahoo Finance.
Some of the biggest losers from Donald Trump’s first new round of tariffs may have turned out to be cheap fashion fans.
On Monday, the president doubled back on his threats to impose a 25% tax on imports from Mexico and Canada, agreeing to postpone the new levies for at least a month after winning some light concessions on border security from the two countries. However, Trump pushed ahead with a 10% tariff on all Chinese merchandise.
As part of that move, the White House also announced that it would close the century-old de minimis exemption, which allows packages worth under $800 to be shipped into the country duty-free. That rule has allowed for the massive growth of Chinese discount retailers such as Shein and Temu, which ship everything from designer knockoff dresses to gaming monitors at rock-bottom prices directly to consumers from overseas warehouses, one tax-free bundle at a time.
That rapid expansion was propelled by 2016 legislation, which increased the value limit of de minimis parcels to $800 from $200. The number of packages entering the country that way surged from 139 million in 2015 to more than 1.36 billion in 2024, according to US Customs and Border Protection, and now account for 90% of all shipments into the US.
The increase has drawn frustration from American manufacturers and retailers, who’ve argued that the de minimis rule offers an unfair loophole that Chinese competitors have been able to exploit. Amazon (AMZN), meanwhile, has recently tried to keep up with its insurgent competitors by building its own direct-from-China marketplace — a “Temu clone” that earned some mixed reviews.
The de minimis rule has also come under intense bipartisan scrutiny in recent years for aiding drug traffickers, who’ve exploited it to move small packages containing the precursor chemicals used in the production of fentanyl undetected across borders. The sheer crush of packages arriving daily by the plane load has made it impossible to carefully inspect most of them, allowing mass quantities of narcotics ingredients to make their way to cartels.
Read the full report by Jordan Weissmann at Yahoo Finance here, and for more about the de minimis loophole and the RV industry, click here.
