Starting May 2, President Donald Trump ended duty-free de minimis treatment for low-value imports from the People’s Republic of China (PRC) and Hong Kong. This follows notification by the Secretary of Commerce that adequate systems are in place to collect tariff revenue.
The President signed the Executive Order ending the de minimis exceptions on April 2. The White House Fact Sheet on the subject said the President was eliminating duty-free de minimis treatment “as a critical step in countering the ongoing health emergency posed by the illicit flow of synthetic opioids” into the United States.
Removal of the trade policy will affect Chinese e-commerce, as well as low-income American consumers and small businesses that rely on inexpensive products and materials from China.
Increased Tax
The tariff exemption previously allowed shipments worth $800 or less to come into the United States duty-free and often bypass certain inspections and paperwork. Now, items will be subject to a duty rate of either 30% of their value or $25 per item (increasing to $50 per item after June 1, 2025). That is on top of the 145% tariffs already placed on all Chinese imports.
Packages sent via the U.S. Postal Service now are subject to a tax of 120% of the package’s value or a flat fee of $100 per package — which rises to $200 in June.
Congress established the de minimis policy in 1938 as Section 321 of the Tariff Act of 1930, allowed travelers returning to the United States to bring with them goods worth up to $5 without declaring them to customs. Since 2016, the threshold has been $800 and the de minimis rule helped to reduce administrative burdens while it has grown to encompass more than 90% of all cargo entering the United States — 60 % from China.
More Shipments
After Congress raised the qualifying threshold to shipments valued at less than $800 in 2016, the de minimis shipments increased — especially during the COVID years. China accounted for the majority of the shipments by far. In 2023, 62% of all de minimus shipments, valued at nearly $34 billion, came from China, according to U.S. Customs and Border Protection.
From 2018 to 2023, the amount of low-value e-commerce exports from China ballooned, according to the Congressional Research Service. The PRC expanded its global e-commerce exports by more than tenfold.
A key part of China’s global e-commerce growth has been expanding PRC and PRC-tied e-commerce firms into the U.S. market. The U.S. retail e-commerce market makes up more than half of all global e-commerce sales. PRC e-commerce policies have promoted PRC exports while limiting the scope of PRC e-commerce imports.
Staff Contact: Susanne T. Stirling
