Trump Signs Order Closing Exemptions to Low-Cost Imports From China

Wednesday’s order implements duties on de minimis packages starting May 2 at 12:01 a.m.

Containers at a port in Nanjing in eastern China's Jiangsu province, on Oct. 27, 2022. Chinatopix via AP

President Donald Trump signed another executive order on Wednesday, directed at closing a previous loophole that postponed duties on low-cost made-in-China imports.

In a Feb. 5 executive order, Trump paused tariffs on low-cost, or de minimis, packages from China and Hong Kong until the Commerce Department could implement proper measures, procedures, and systems to ensure comprehensive package processing and duty collection.

Wednesday’s order implements duties on de minimis packages starting May 2 at 12:01 a.m., citing China’s role in facilitating synthetic opioid trafficking into the United States.

“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,” a White House fact sheet states.

Imported goods valued at or under $800, sent through channels other than the international postal network, were previously subject to the de minimis exemption. The new duty rate is 30 percent of their value or $25 per item, with the amount increasing to $50 after June 1.

Carriers that transport these goods are required to report shipment details to Customs and Border Protection (CBP) while maintaining an international carrier bond to ensure duty payment. They must also remit duties to CBP on a set schedule.

The April 2 order requires the secretary of commerce to submit a report within 90 days assessing its impact and considering whether to extend these rules to products from Macau.

Worldwide digital commerce companies have exploited the exemption to send duty-free goods worth less than $800 to the United States. Industry experts have said this created a competitive advantage for Chinese e-commerce companies like Shein and Temu.

Removing the exemption was expected to flood CBP with low-cost shipments requiring formal processing, including inspection and duties.

In January, CBP projected that it received more than 1.36 billion de minimis shipments during fiscal year 2024.

The Trump administration has repeatedly said the exemption should end because of China’s role in fentanyl trafficking into the United States, suggesting exporters have used it as a loophole.

“What the cartels in China have done is to exploit that loophole to smuggle in not just fentanyl but all sorts of drugs,” Peter Navarro, White House senior counselor for trade and manufacturing, said at a Politico Playbook event on Feb. 4.

House Ways and Means Trade Subcommittee Ranking Member Linda Sanchez (D-Calif.) estimated that 90 percent of fentanyl currently in the United States comes from packages entering the country under the de minimis policy.

Andrew Moran contributed to this report.