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Small-value packages shipped to the US from China will no longer be exempted from tariffs starting Friday, when President Donald Trump’s move against an exception he called a “big scam” takes effect.
The decision to end the so-called “de minimis” exception is expected to have wide-ranging effects on American consumers who have increasingly purchased cheap clothing, household goods and other products from discount Chinese marketplaces such as Temu and Shein Group Ltd. It could also deal a heavy blow to independent online sellers who rely on Chinese imports.
Temu said Friday it would abandon a model centered on cheap Chinese imports that catapulted it to success in the US, shifting instead to what it calls “local fulfillment” by recruiting US merchants to sell locally based merchandise. That’s expected to allow it to sidestep tariffs, and the PDD Holdings Inc. unit said in an emailed statement that it intends to keep prices for Americans unchanged.
Trump last month signed an executive order closing a loophole that has allowed items from China and Hong Kong valued at no more than $800 to enter the US without customs declarations and import duties. The Trump administration has said it’s taking aim at the de minimis exception because it could be exploited to send ingredients used to make illicit fentanyl into the US while avoiding detection by authorities.
The US president also said the exemption has benefited Chinese e—commerce shopping platforms at the expense of US mom-and-pop retailers.
“De minimis. It’s very — it’s a big deal. It’s a big scam going on against our country, against, really, small businesses and we’ve ended it,” Trump said Wednesday during a cabinet meeting.
Packages from China and Hong Kong will now be taxed at a rate of 120% of their value or charged a flat rate. That fee starts at $100 and is set to increase to $200 on June 1. While Americans can still buy goods from places such as Temu and Shein, their costs will likely increase as retailers hike prices ahead of the tariffs.
The change takes hold as Americans grow increasingly skeptical of Trump’s economic agenda and tariff program. A disruption of shopping patterns could put further pressure on the White House to broker a deal with China to bring down trade barriers.