If you’ve purchased something from Chinese e-commerce giants Shein, Temu or Alibaba, then you may have benefited from a trade loophole called the de minimis exemption.
The longstanding exemption allows packages valued at under $800 to enter the U.S. without being subject to tariffs. The goal was simple: The government would save the expense of processing a tariff fee that is lower than what it costs to collect it. Many other countries have similar exemptions, though the U.S. has one of the highest thresholds.
“It doesn’t make sense to spend a dollar trying to collect 50 cents worth of tariffs or duties,” said Clark Packard, a research fellow at the Cato Institute, a public policy think tank based in Washington, D.C.
As part of his escalating trade war with China, President Donald Trump signed an executive order this month ending the decades-old exemption on packages coming into the U.S. from China and Hong Kong. It goes into effect May 2.
