(Bloomberg) — US President Donald Trump on Wednesday signed an executive order suspending the de minimis exemption, applying tariffs to low-value imports from all trading partners.
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The measure will be effective on Aug. 29 and apply to all goods that are valued at or under $800 that previously qualified for that tax-free treatment, according to a White House fact sheet.
Some exemptions for US travelers, allowing them to bring back up to $200 in personal items, and for individuals to continue receiving “bona fide gifts” valued at $100 or less duty-free will remain in place, the White House said.
Trump’s order will apply fresh duties to online retailers that ship directly to US consumers. Packages coming into the US have long qualified for the exemption, which has been a boon for companies abroad ,such as discount retailers Temu and Shein Group Ltd., that ship low-cost clothing, household goods and other items directly to American consumers.
The White House cast the measure as closing “a catastrophic loophole used to, among other things, evade tariffs and funnel deadly synthetic opioids as well as other unsafe or below-market products” into the country. The Trump administration has accused Chinese companies of abusing the tariff exemption to ship illegal synthetic opioids and precursor chemicals into the US.
The full scope of the order was not immediately clear, but it’s the latest pivot from the Trump administration on how to apply tariffs to low-value packages.
Trump initially moved to suspend the de minimis rule for China and Hong Kong within days of taking office though his administration was forced to make a brief but hasty retreat, suspending the change as the US Postal Service grappled with how to implement the policy. Trump effectively reimposed the policy change for low-value packages from China and Hong Kong on May 2.
That decision that is being challenged in court. On Monday, the Court of International Trade declined an effort to restore that more favorable tax treatment for Chinese goods.
The president’s order on Wednesday comes ahead of an Aug. 1 deadline when a slew of so-called reciprocal tariffs are slated to take effect on trading partners.
(Updates with additional background in paragraph seven)
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