US Ends Tariff Exemption For Low-Value Packages Amid Trade Crackdown
The United States will scrap a long-standing 'de minimis' exemption that allowed low-value shipments to enter the country without tariffs, the White House announced on Wednesday.
Under an executive order signed by President Donald Trump, packages worth US$800 or less sent outside the international postal system will be subject to 'all applicable duties' starting August 29. The exemption, which fuelled a boom in cross-border e-commerce, previously enabled retailers and consumers to bypass customs duties on small shipments.
'Trump is acting more quickly to suspend the de minimis exemption than the OBBBA requires, to deal with national emergencies and save American lives and businesses now,' the White House said, referring to the recently signed One Big Beautiful Bill Act. The legislation will fully repeal the exemption worldwide in July 2027, but Trump's move accelerates the timeline.
Goods sent through postal networks will face either an ad valorem duty equal to the originating country's tariff rate or a temporary fixed tariff of US$80 to US$200 for six months.
The exemption's removal follows Trump's earlier actions targeting packages from China and Hong Kong. Since May, shipments from both markets have faced tariffs as high as 145%, later reduced to around 30% after a trade truce in mid-May.
Low-value e-commerce, particularly from Asia, has become a major driver of air freight, accounting for 55% of China-to-US air shipments in 2024 compared to just 5% in 2018. Platforms like Shein and PDD Holdings' Temu have benefited from the previous duty-free regime.
Annual de minimis shipments surged from 134 million in 2015 to over 1.36 billion by 2024, with US Customs processing more than 4 million packages daily. Air cargo volumes from Asia have already dropped 10.7% since the US ended tax-free treatment for low-value goods from China in May.
Republican Senator Jim Banks welcomed the policy shift, saying, 'For too long, countries like China have flooded our markets with duty-free, cheap imports.'
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