The United States will terminate its de minimis exemption for imports from China and Hong Kong on May 2, 2025, ending duty-free entry for packages valued under US$800.
The White House announced on Wednesday that the de minimis exemption, used by many ecommerce companies to send goods valued at less than US$800 into the U.S. duty-free, will no longer apply to products from China and Hong Kong starting next month, and its elimination is expected to affect other countries soon.
The "de minimis" rule triggered the explosion of affordable goods being shipped out of China to the U.S., creating a competitive advantage for these low-value shipments. The U.S. Customs and Border Protection (CBP) reported processing over 1.3 billion de minimis shipments in 2024, with the Chinese commerce companies Temu and Shein accounting for more than 30% of these shipments.
It stated that "nearly half" of all de minimis shipments also likely originated from China.
"President Donald J. Trump signed an Executive Order eliminating duty-free de minimis treatment for low-value imports from China, a critical step in countering the ongoing health emergency posed by the illicit flow of synthetic opioids into the U.S.," the White House said.
"Following the Secretary of Commerce's notification that adequate systems are in place to collect tariff revenue, President Trump is ending duty-free de minimis treatment for covered goods from the People's Republic of China (PRC) and Hong Kong starting May 2, 2025, at 12:01 a.m. EDT," it added.
The announcement stated that imported goods valued at or under US$800, sent through methods other than the international postal network and eligible for the de minimis exemption, will now be subject to all applicable duties. These duties must be paid according to established entry and payment procedures.
If they do enter via the postal system, a duty rate of either 30% of their value or US$25 per item will apply in lieu of any other fees. The US$25 charge will increase to US$50 per item after June 1.
The CBP may also require postal packages to undergo formal entry procedures, in which case they will be subject to all applicable duties, taxes, and fees instead of the specified duties.
Macau inclusion eyed
"The Secretary of Commerce will submit a report within 90 days assessing the Order's impact and considering whether to extend these rules to packages from Macau," the White House added.
The de minimis exemption has enabled top Chinese e-commerce companies like Shein and Temu to reduce shipping costs and maintain a lean inventory by shipping products directly from factories in Asia to consumers. The exemption is also widely utilised by smaller brands that depend on China-to-U.S. delivery or resell goods manufactured in China.
"President Trump is targeting deceptive shipping practices by Chinese-based shippers, many of whom hide illicit substances, including synthetic opioids, in low-value packages to exploit the de minimis exemption," the announcement regarding the end of the de minimis exemption said.
On average, the CBP processes over four million de minimis shipments into the U.S. each day. It noted that in the last fiscal year, the agency also seized more than 21,000 pounds of fentanyl at U.S. borders, although it did not specify what percentage came from de minimis exempted products.
"While the U.S. previously offered a generous de minimis exemption, China enforces strict import restrictions and tightly limits de minimis exemptions, showing no similar leniency toward U.S. shipments," the White House said.
On February 1, U.S. President Trump suspended the exemption as part of new tariffs that imposed an additional 10% tax on Chinese goods. He then signed an executive order suspending the closing of the de minimis trade exemption hours after due to a lack of infrastructure and workable solutions for customs and postal services to manage the volume and procedure.