In a significant shift in US trade policy, President Donald Trump has terminated the longstanding “de minimis” tariff exemption for low-value imports from China and Hong Kong, according to Reuters.
Effective from May 2, 2025, this change subjects small parcels, previously entering the US duty-free, to steep tariffs, with rates reaching up to 145% for most Chinese goods.
The policy aims to address concerns over illicit goods and to bolster domestic retailers, but has led to substantial disruptions in global e-commerce.
Retailers are responding in various ways. British beauty brand Space NK has halted US shipments to prevent unexpected costs for customers. Canadian lingerie company Understance announced a suspension of US orders, citing the untenable nature of the new tariffs.
Meanwhile, fast-fashion giants Shein and Temu are increasing prices and promoting products from US warehouses to mitigate the impact.
The elimination of the de minimis exemption, which previously allowed goods under $800 to enter the US without duties, is part of a broader strategy to reshape trade relations and curb the influx of low-cost imports.
While the move may benefit brick-and-mortar retailers by leveling the playing field, it poses significant challenges for small and medium-sized enterprises that rely on affordable international shipping.
This policy change has sparked concerns among businesses and consumers alike, as companies navigate the complexities of new import regulations and potential supply chain disruptions.
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