Trump closes De Minimis loophole, Targeting Shein and Temu
President Donald Trump signed an executive order on April 3, 2025, closing the de minimis loophole, ending duty-free imports for low-value packages from Chinese-owned retailers like Shein and Temu. Effective May 2, shipments under $800 from China and Hong Kong will face tariffs of 30% or a flat $25 per item, rising to $50 after June 1. The move aims to protect U.S. industries and curb illicit goods like fentanyl hidden in small shipments.
The de minimis rule, expanded to $800 in 2016, fueled an e-commerce boom, with over 1.3 billion shipments processed in 2024—nearly half from China. Shein and Temu, dominating fast fashion and discount retail, thrived by dodging tariffs. U.S. retailers like Forever 21, which blamed these firms for its recent liquidation, hailed the change. “Non-U.S. retailers’ low prices hurt our base,” said Forever 21’s Stephen Coulombe.
Prices on Shein and Temu goods could rise 30%, costing consumers $22 billion yearly, per economist Gary Hufbauer. Lower-income shoppers may feel the brunt. Both companies are adapting—Shein diversifying to Vietnam and Brazil, Temu shifting to U.S. warehousing—but air-freight-reliant Shein may struggle more.
A February suspension caused port chaos, prompting a delay. Now, with a month’s notice, Commerce Secretary Howard Lutnick says systems are ready. Trump ties the policy to punishing China for trade imbalances and the opioid crisis. Debate persists: will it aid U.S. firms or just raise costs? May 2 will tell.
