American importers front loaded inventory in February and March with a 50% increase in orders. Now, in addition to those factories going quiet, the de minimis rule kicks in.Posted on 05/04/2025 8:16:41 AM PDT by SoConPubbie
American importers front loaded inventory in February and March with a 50% increase in orders. Now, in addition to those factories going quiet, the de minimis rule kicks in.
(Via CNBC) – Chinese bargain retailer Temu changed its business model in the U.S. as the Trump administration’s new rules on low-value shipments took effect Friday.
In recent days, Temu has abruptly shifted its website and app to only display listings for products shipped from U.S.-based warehouses. Items shipped directly from China, which previously blanketed the site, are now labeled as out of stock.
Temu made a name for itself in the U.S. as a destination for ultra-discounted items shipped direct from China, such as $5 sneakers and $1.50 garlic presses. It’s been able to keep prices low because of the so-called de minimis rule, which has allowed items worth $800 or less to enter the country duty-free since 2016.
The loophole expired Friday at 12:01 a.m. EDT as a result of an executive order signed by President Donald Trump in April. (more)
The de minimis loophole comes from back in the 1930s. The idea back then was, say you went on a vacation to Paris, you shouldn’t have to file customs paperwork or pay taxes if you decided to ship some little Eiffel Tower statues to your friends back home.
Congress in 2015 then raised the de minimis threshold from $200 to $800. However, the e-commerce world exploded, and Chinese companies began using the de minimis loophole to ship cheap goods (ex. Temu and Shein) into the USA direct to consumers without paying any customs duty.
On April 2nd, as part of the global trade reset and tariff structure, President Trump revoked authorization for Chinese goods to transfer to the USA using the de minimis rule. The de minimis exemption was cancelled for all products coming out of China. The rule change only targeted China and Chinese shippers. No one else. [XO HERE]
As part of the modification to Executive Order #14257, President Trump has increased the baseline tariff for product mailed from China [de minimis tariff] from 30 90 percent to 120%.
Mailed products from China now face a 120% tariff. Additionally, minimum tariff amounts increased from $75 to $100 effective May 1st, and from $150 to $2oo effective June 1st. [See Section #4]
Example: If you order a $20 shirt from China effective June 1st, you will pay $220. $20 for the shirt, and $200 minimum tariff.
Yep, this is only the beginning.
YEA ... the tsunami of the cheapest, crappiest garbage from china is halted ...
YAY!!! Always avoided TEMU...
Actually, the rule kicks out. It used to allow sales under $800 to escape export fees and tariffs. An EO by Trump ended the de minimis rule.
As if on cue, a short article from the Chamber of Shipping notes that cargo from China is being rerouted to avoid tariffs.
The destination of the cargo is, wait for it,… CANADA!
USCoS – As U.S. tariffs on Chinese goods soar to as high as 145%, a growing number of companies are rerouting shipments to Canada and storing them in bonded warehouses in hopes of avoiding the duties and capitalising on a future rollback. This strategy has caused a sharp spike in Chinese shipments to Canada, with logistics firms and customs brokers reporting surging inquiries and storage demand from consumer goods, chemical, and auto parts sectors. However, experts caution that prolonged storage costs—estimated at $1,750 per container per week—and limited warehouse capacity could force sellers to offload discounted goods into the Canadian market, potentially disrupting domestic manufacturing. Others warn the strategy is risky and unsustainable, especially if the trade conflict drags into next year’s U.S.-Mexico-Canada Agreement negotiations. (link)
This will not end well….
/sarc
Hmm, rerouted. Ship to a “manufacturer” in some other 3rd world country and stamp it “made in XYZ” and they’re still in business.
How will America survive without being able to waste money on cheap knockoff garbage?
Chaina had a great deal with the de minimis rule allowing small Chinese companies to sell directly into the American market... Xi threw that away..
Thank God Trump’s President and he’s stopping de minimis for the benefit of the American people - - citizens who NEED CHINA TO COME TO THE TABLE AND CREATE FAIR TRADE RULES between our countries.
The days of ripping off the United States by handing diamonds and cash to our corrupt democrat politicians is over.
It’s so nice not having Temu pop-up ads in my face all the time.
What a nuisance.
Big win for America.
It’s a little scary that Senator Thune was one of the originators of the bill that increased the diminimus amount from $200 to $800. Is he on the MAGA side?
And without that competition guess what’s going to happen to the prices of those things built here?
They were mostly not available from any other source that I could find or were less than half the price than sellers on Amazon and eBay were asking for the same thing. The shipping was either free or very low cost and most of them came within a couple of weeks. Typically, my orders were consolidated into one box or bag in China and then sent here.
My friend who owns a customs brokerage has done the same thing, but of course he has made all sorts of claims that huge amounts of drugs and other illegal items have been shipped here under the cover of all of these De Minimis qualifying orders. He believes that the new rules are going to help his business.
No country in the world conducted a similar kind of de minimus “free trade” that the US did. Not even close.
Try sending a package, any package, to China. It will get opened, examined (often destroyed), have documents examined, will be taxed, etc....
China's trading and economic can not change without changing the CCP - so that will never be allowed to happen.
It goes way beyond just duty rates.
What year did that happen?
Good point - but the longest journey starts with one foot forward... China needs to come to the table and start the process of becoming a first world country in more ways than just 'stuff'.
E-bay has added tariffs to shipping costs. A $9 remote control shipped from China now has $103 shipping costs. 😁
Amazon just removed the products shipped from China.
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