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Наталя ХандусенкоMoney
3 April 2025, 11:45
2025-04-03
With his new tariffs, Trump has cut off Americans from super-cheap goods from China. For Temu, this is a possible loss of over 180 million consumers, and for the US, such a change could cost up to $13 billion annually.
The United States has had a tariff exemption for almost a century, known as “de minimis,” which allowed goods up to a certain amount to be imported duty-free. The idea was to allow Americans to bring home souvenirs from their travels without any hassle. Over time, “de minimis” became a loophole for Chinese marketplaces that was closed yesterday.
On Wednesday, US President Donald Trump signed an executive order closing this loophole for cheap goods from China, effective May 2. Packages worth up to $800 enjoyed a “minimal” exemption from additional duties, allowing foreign online retailers like Temu and Shein to sell super-cheap goods to American consumers.
The United States has had a tariff exemption for almost a century, known as “de minimis,” which allowed goods up to a certain amount to be imported duty-free. The idea was to allow Americans to bring home souvenirs from their travels without any hassle. Over time, “de minimis” became a loophole for Chinese marketplaces that was closed yesterday.
On Wednesday, US President Donald Trump signed an executive order closing this loophole for cheap goods from China, effective May 2. Packages worth up to $800 enjoyed a “minimal” exemption from additional duties, allowing foreign online retailers like Temu and Shein to sell super-cheap goods to American consumers.
What will change for American consumers?
Starting May 2, postal items worth up to $800 through the international postal network will be subject to a duty of 30% of their value or $25 per postal item. Starting June 1, the rate per postal item will increase to $50.
One study cited by the Cato Institute estimates that eliminating the exemption would cost Americans between $11 billion and $13 billion annually, or about $35-$80 per person.
The American market for Chinese online retailers in numbers
The so-called “de minimis” loophole has been in place in the United States since the 1930s. The exemption was originally introduced to allow tourists to bring home souvenirs from abroad without paying duty.
Over time, this “de minimis” exception has helped startup marketplaces like Temu and Shein grow rapidly in the US.
According to a report by the US Congressional Research Service, exports of cheap goods will soar to $66 billion in 2023, compared to $5.3 billion in 2018.
According to U.S. Customs and Border Protection, in 2024, the total volume of de minimis shipments to the United States reached 1.4 billion packages, approximately double the volume in 2022.
As of August 2024, Temu had 185.6 million monthly active users in the US, up 34% from last year.
How did the shares of Chinese companies react to such changes?
Shares of PDD Holdings, the owner of Temu, fell 6% in over-the-counter trading. Shares of Alibaba Group Holding and JD.com in Hong Kong also fell 6% today, April 3.
