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Fortune: A different shock to the system’: De minimis tariff dodge ending means less purchasing power for Americans

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  • The de minimis exemption, which allowed overseas orders under $800 to come into the U.S. duty-free, ended Friday. In effect, American consumers will experience less purchasing power for goods produced or sourced from other countries.

The de minimis exemption—a tariff loophole that for years made millions of direct-to-consumer imports duty free—is gone, and its end marks a structural shift for American shoppers and logistics providers. 

Up until Friday, U.S. consumers could order up to $800 in goods per package from overseas without paying any tariffs or taxes. Now, this landscape is changing, adding to inflationary pressures that will squeeze everyday purchasing power, particularly for low- and middle-income Americans, experts tell Fortune.

“It’s a different shock to the system at a different level than what we’ve seen with the tariffs on large industrial goods,” Rob Haworth, senior investment strategy director at U.S. Bank, told Fortune. “It does start up another near-term challenge for consumers and for businesses and spending overall.”

The de minimis exemption ended in May for imports from China, where an estimated three-quarters of goods under the $800 threshold came from, with a large share coming from e-commerce companies Shein and Temu. The de minimis suspension for parcels from all other countries implemented Friday now means the American dollar won’t buy as much as it used to, when it comes to shoppers purchasing goods made overseas.

“Categories like footwear and apparel will see some of the highest impacts, estimated at 15%-25% increased end consumer pricing, given the manufacturing origin often being China,” Sean Henry, CEO of Stord, an e-commerce and fulfillment company, told Fortune.

A senior Trump administration official said that the U.S. Customs and Border Protection agency has collected more than $492 million in additional duties on packages shipped from China and Hong Kong since ending the exemption.

And tariffs on goods that previously fell under de minimis could raise as much as $10 billion a year, U.S. trade advisor Peter Navarro told reporters Thursday. Putting that into perspective, the 2024 trade deficit in goods was $1.2 trillion.

“The net number (of tariff revenue without de minimis) is not all that meaningful in terms of how big the deficit is,” Baird Investment Strategist Ross Mayfield told Fortune. “The bigger difference is going to be the extent to which the government is levying these bigger, kind of broader swaths of tariffs.”

Over the past decade, the number of shipments entering the U.S. de minimis surged by more than 600%, from approximately 139 million in 2015 to almost 1.4 billion, according to U.S. Customs and Border Protection. However, the amount of revenue generated by these new tariffs depends on whether consumers are willing to continue to purchase cheap products from abroad.

“Nearly 40% of online shoppers abandon their carts when faced with these extra tariff and duty surcharges at checkout,” Stord CEO Henry said.

Lee Klaskow, a senior analyst of transportation and logistics at Bloomberg Intelligence, told Fortune he expects spending on these largely “discretionary” purchases to decrease.

“That Shein shirt that you really want that’s $5—maybe you’ll think twice about getting it because it’s going to be more expensive,” Klaskow said.

Prior to the pandemic, consumers had a “huge appetite for cheap things,” but Klaskow expects consumer behavior to flip in response to the change. 

U.S. Bank’s Haworth said he’s more focused on how the government will implement the change, as it will require new systems, investment, and infrastructure to collect on small purchases. 

He added the whole purpose of de minimis was to streamline the process of bringing small imports into the country, since they are more complex to track. The government has previously said this allowed illicit substances like fentanyl to cross into the U.S. more easily. Still, the system will need to recalibrate to adhere to the new rules.

“Originally why you had a de minimis exemption is so that you weren’t spending a lot of time on small transactions that didn’t net anything,” Haworth said. “So that’s kind of an interesting or challenging cost that is going to come into the business system.”

‘A different shock to the system’: De minimis tariff dodge ending means less purchasing power for Americans

https://www.msn.com/en-us/money/markets/a-different-shock-to-the-system-de-minimis-tariff-dodge-ending-means-less-purchasing-power-for-americans/ar-AA1LxCkK

CNN: End of an era: Billions of packages of ‘cheap’ goods shipped to the US are now subject to steep tariffs

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A big change to all the “cheap goods” Americans order just went into effect.

For nearly a century, low-value packages of goods from abroad have entered the United States duty free, thanks to what’s known as the “de minimis rule,” which as of 2015 has applied to packages worth less than $800.

The loophole has reshaped the way countless Americans shop, enabling many small businesses globally to sell goods to US consumers with relative ease and allowing, in particular, ultra-low-cost Chinese e-commerce sites like Shein, Temu and AliExpress to sell everything from clothing to furniture to electronics directly to American shoppers, escaping many duties in place for packages exceeding the $800 threshold.

But those days are over. As of one minute past midnight Eastern Time, all imported goods — regardless of their value — are now subject to 10% to 50% tariff rates, depending on their country of origin. (In certain cases, they could face a flat fee of $80 to $200, but only for the next six months.)

A headache for delivery services

Ahead of the expiration of the de minimis rule, a slew of delivery services across Europe, as well as Japan, Australia, Taiwan and Mexico suspended deliveries to the United States, citing logistical compliance challenges.

International shipper UPS, meanwhile, said in a statement to CNN Thursday: “We stand ready for the new changes and do not anticipate any backlogs or delays.”

DHL, which suspended service for standard parcel shipments from Germany but is continuing to ship international packages to the United States from all other countries it serves, told CNN that shipments “may experience delays during the transitional period as all parties adjust to the changes in tariff policy and regulation.”

The United States Postal Service and FedEx declined to comment on whether customers should anticipate delays.

“Our systems are fully programmed and equipped to support the seamless implementation of these changes. CBP has prepared extensively for this transition and stands ready with a comprehensive strategy, having provided clear and timely guidance to supply chain partners, including foreign postal operators, carriers, and qualified third parties to ensure compliance with the new rules.

Susan Thomas, the acting executive assistant commissioner for Customs and Border Protection’s Office of Trade, told CNN in a statement that the agency’s systems “are fully programmed and equipped to support the seamless implementation of these changes.”

“CBP has prepared extensively for this transition and stands ready with a comprehensive strategy, having provided clear and timely guidance to supply chain partners, including foreign postal operators, carriers, and qualified third parties to ensure compliance with the new rules,” she said.

A potential benefit for some American small businesses

While some small businesses, like some individual consumers, have benefited from the de minimis exemption by purchasing goods duty-free, the end of the exemption may benefit some, too.

For Steve Raderstorf, co-owner of Scrub Identity, which sells scrubs and other medical apparel at two stores located in Indianapolis, the tariff change will “level the playing field” for him and, he believes, other small business owners, he said.

A 2023 report by Coalition for a Prosperous America, a group that advocates for US producers and manufacturers, estimates that e-commerce giants like Amazon and Walmart took in hundreds of billions of dollars in revenue in 2022 through their networks of third-party sellers who took advantage of the loophole.

Raderstorf said almost all the goods he sells are imported. But as a small business, he doesn’t have the ability to set up a third-party network to tap into the exemption. Instead, his imported goods are all subject to applicable tariffs.

Additionally, many of the foreign manufacturers from whom he purchases goods in bulk in order to get a better price have benefited from de minimis by setting up sites to sell directly to people who could have otherwise shopped at his stores.

With de minimis gone, he feels small businesses have a better chance to compete more fairly with mega retailers and also support their local communities more.

“When somebody comes to my door and they want me to support the local football team or baseball team, I have money to do that then, and then it gets back into the community,” he told CNN. “When it goes to China, it never, ever stays in the United States — it’s gone for good.”

Since the de minimis exemption was closed for China and Hong Kong, CBP has seen packages that would have otherwise qualified for duty-free status go down from an average of 4 million a day to 1 million, White House officials told reporters Thursday.

Raderstorf is empathetic to Americans who are concerned about the increased cost of goods — but at the same time, he’s hopeful it’s “going to push them back out into their communities to meet their local retailers.”

End of an era: Billions of packages of ‘cheap’ goods shipped to the US are now subject to steep tariffs | CNN Business
A big change to all the “cheap goods” Americans order just went into effect.

https://www.cnn.com/2025/08/29/business/end-of-an-era-billions-of-packages-of-cheap-goods-shipped-to-the-us-are-now-subject-to-steep-tariffs

Market Watch: Trump closes the ‘de minimis’ shipping loophole. Etsy and eBay shares have tumbled.

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‘De minimis’ exemption for shipments worth $800 or less now has ended

Shares of Etsy Inc. and eBay Inc. have been down sharply over the past week, with analysts pinning the moves on the Trump administration’s closure of a trade loophole on Friday.

The “de minimis” exemption has made it possible for shipments worth $800 or less to avoid tariffs and U.S. Customs and Border Patrol scrutiny. It was ended in May for shipments from China, hurting e-commerce companies Shein and PDD Holdings Inc.’s (-1.34%) Temu, and the loophole now has gone away for all other countries, as well.

President Donald Trump rolled out an executive order targeting de minimis treatment on July 30, specifying that the exemption would end at 12:01 a.m. Eastern time Friday.

Trump’s order is “removing a key channel for low-value cross-border shipments,” Cantor analysts said in a report, and Etsy  (-1.43%), eBay (-1.70%) and Shopify (SHOP -0.06%) “likely have notable direct exposure.” They noted that Etsy and eBay have underperformed the Nasdaq Composite Index (-1.15%)  over the past week. As of Thursday’s close, Etsy shares are down 14% over the past five trading sessions, while eBay has dropped 6% and Shopify is down 1%. The Nasdaq is up 1% over the same period.

“Over the medium term, supply diversification from domestic sellers should mitigate the impact on demand,” the Cantor analysts wrote.

Etsy has offered a guide to its sellers as the de minimis exemption comes to an end, promising to “continue to share updates over the next few months that make it easier to facilitate cross-border transactions and incorporate the cost of tariffs into your shop operations.” The chief executive for eBay, Jamie Iannone, said during an earnings call on July 30 that the company is “not immune to the increased costs from tariffs” but believes it is “relatively resilient from that perspective, more so than others.”

The overall impact to the U.S. economy of eliminating the loophole is “likely to be limited,” Evercore ISI analysts said in a note. Shipments claiming the de minimis exemption were valued at $65 billion in the past fiscal year, amounting to around 2% of total U.S. imports.

While postal carriers for a number of countries have announced they’re temporarily suspending shipments to the U.S. due to operational uncertainty around the new policy, the Evercore analysts noted that Customs and Border Patrol data show that more than 90% of de minimis packages are carried by private express carriers and logistics providers, who are “not indicating any disruption when the policy takes effect.”

“The move will have an impact on some consumers who will now bear at least a share of tariffs as well as the higher administrative costs associated with processing smaller packages for tariff collection,” the Evercore analysts said. They noted that a recent study found that both high- and low-income households have taken advantage of the de minimis exemption, but that “low-income households benefit disproportionately as a share of their income.”

In addition, Evercore’s team noted that all existing tariffs now will apply to packages under $800, except during a six-month transition period when there will be an option of paying either a percentage rate equal to the country-specific tariff or a flat fee ranging from $80 to $200 that scales with the country’s tariff rate.

Peter Navarro, Trump’s senior counselor for trade and manufacturing, predicted on Thursday afternoon that ending the de minimis loophole “will save thousands of American lives by restricting the flow of narcotics and other dangerous and prohibited items, add up to $10 billion a year in tariff revenues to our Treasury, create thousands of jobs and defend against billions of dollars more lost in counterfeiting, piracy and intellectual-property theft.”

Navarro also criticized foreign postal carriers that have suspended shipments to the U.S.

“Foreign post offices need to get their act together when it comes to monitoring and policing the use of international mail for smuggling and tariff-evasion purposes,” the Trump adviser told reporters during a briefing. “We are going to help them do that, but at this point, they are vastly underperforming express carriers like FedEx (-0.29%), DHL (-0.36%) and UPS (+0.24%) .”

The Alliance for American Manufacturing is among the organizations praising Trump’s move.

“Closure of the de minimis loophole is an important step forward, but there’s still more work to be done in leveling the playing field for U.S. manufacturers,” AAM President Scott Paul said in a statement. He said the loophole hurt American manufacturers and was “exposing American consumers to illegal, counterfeit and toxic products.”

Trump closes ‘de minimis’ shipping loophole. Etsy and eBay shares have tumbled.
The “de minimis” exemption for shipments worth $800 has ended.

https://www.marketwatch.com/story/trump-is-closing-a-shipping-loophole-shares-in-etsy-and-ebay-are-tumbling-baffd57f

Inquirer: Trump moves to tax parcels; some retailers give up on US

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As the United States ends a tariff exemption for small parcels on Friday, some retailers have stopped selling to US customers while others are seeking temporary workarounds in the hope the tariff rate may be reduced.

The removal of “de minimis”—duty-free treatment of e-commerce packages worth less than $800—for products originating from China and Hong Kong exposes those goods to tariffs of 145 percent on most Chinese goods following US President Donald Trump’s decision last month. The move upended global trade and triggered retaliation from Beijing.

Trump moves to tax parcels; some retailers give up on US
LONDON—As the United States ends a tariff exemption for small parcels on Friday, some retailers have stopped selling to US customers while others are seeking temporary workarounds in the hope the tariff rate may be reduced. The removal of “de minimis”—duty-free treatment of e-commerce packages worth less than $800—for products originating from China and Hong Kong exposes those goods to tariffs of 145 percent on most Chinese goods following US…

https://www.msn.com/en-ph/news/other/trump-moves-to-tax-parcels-some-retailers-give-up-on-us/ar-AA1E4Aw6

Daily Express: Temu halts Chinese shipments overnight as Trump kills tariff loophole in crackdown

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Temu, the Chinese e-commerce giant, has ceased shipping products from China to the United States, according to a company spokesperson last Friday as a key tariff loophole was cancelled by the Trump administration.

Now, all U.S. orders will be dispatched from domestic warehouses within America, and products that were once shipped directly from China and dominated the site are now listed as out of stock.

This shift follows the Trump administration’s move to to end the de minimis exemption that permitted Chinese-made goods valued at no more than $800 to enter the U.S. duty-free. The exemption, which President Trump denounced as a “big scam” harmful to American small businesses, expired on this morning.

Most business will never notice, except those order stock & office supplies from China. As usual, King Donald is screwing the consumers, the “Little People”, every day American citizens.

Incidentally, this de minimis exception helped my family get their N-95 masks during the COVID epidemic. I found a supplier in Shanghai whose N-95 mask had the proper U.S. certification and who would ship them direct from Shanghai to my front porch for a reasonable price.

Temu halts Chinese shipments overnight as Trump kills tariff loophole in crackdown
Temu announced they’ll no longer ship products from China to the U.S. after Trump closed a tariff loophole, with ‘Out of Stock’ notices across the site

https://www.msn.com/en-us/money/news/temu-halts-chinese-shipments-overnight-as-trump-kills-tariff-loophole-in-crackdown/ar-AA1E4Ksu

New York Post: Elon Musk rips ‘moron’ Trump trade adviser Peter Navarro: ‘Dumber than a sack of bricks’

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It’s a dog-eat-dog world, and it’s always entertaining to see the mutts chewing on one another. “Dumber than a sack of bricks” applies equally to F’Elon Musk as well as to Peter Navarro.

Musk, 53, responded Tuesday to the trade adviser’s suggestion on CNBC’s “Squawk Box” Monday that the Tesla boss was “not a car manufacturer” but “a car assembler,” pointing to the electric vehicle company’s importing of batteries and other key components to manufacture its cars. 

“Navarro is truly a moron. What he says here is demonstrably false,” Musk wrote on X, adding in a subsequent post in which he tagged the “Re—d Finder”: “Tesla has the most American-made cars. Navarro is dumber than a sack of bricks.”

Elon Musk rips ‘moron’ Trump trade adviser Peter Navarro: ‘Dumber than a sack of bricks’
Billionaire Elon Musk escalated his attacks against White House trade adviser Peter Navarro Tuesday, calling him a “moron” and “dumber than a sack of bricks.”

https://nypost.com/2025/04/08/us-news/elon-musk-rips-moron-trump-trade-adviser-peter-navarro