Trump ends tariff break for low-value goods in blow to online retailers
The move, made in an executive order, will become effective on Aug 29 and apply to all goods valued at or under US$800 that previously qualified for the tax-free treatment, according to a White House fact sheet.
Trump's order effectively suspends the so-called de minimis exemption for tariffs on small-value packages, applying fresh duties to online retailers that ship directly to US consumers.
Packages entering the US have long qualified for the exemption, which has been a boon for companies abroad such as discount retailers Temu and Shein that ship low-cost clothing, household goods and other items directly to American consumers.
The administration is maintaining exemptions allowing US travellers to bring back as much as US$200 in personal items and permitting individuals to continue receiving 'bona fide gifts' valued at US$100 or less duty-free. But the change will apply to 'any shipment of articles' regardless of their value, country of origin, mode of transportation or method of entry, Trump said in his executive order.
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 fentanyl and precursor chemicals into the US.
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Wednesday's order is 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 favourable tax treatment for Chinese goods.
The president's order on Wednesday comes ahead of an Aug 1 deadline when a slew of country-based tariffs are slated to take effect on dozens of trading partners. BLOOMBERG
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