Latest news with #deMinimis
Wall Street Journal
3 days ago
- Business
- Wall Street Journal
De Minimis Exemption Likely Back for Chinese Imports, Trade Lawyer Says
The federal trade court decision striking down President Trump's tariffs appears to also reinstate a popular trade provision used to bring low-cost goods from China into the U.S. duty-free, according to trade attorney Michael Lowell. The so-called de minimis provision that exempts packages of $800 or less from duties was eliminated on May 2 for goods made in China and Hong Kong, after Trump in early April ordered the end of the policy. Use of the exemption has skyrocketed in recent years with a surge of goods from bargain sites Shein and Temu. 'It's pretty clear under the court's order that Trump's revocation of de minimis was also vacated as part of the executive order that was vacated,' said Lowell, partner at Reed Smith. 'The exception should be back in place.'
New York Times
20-05-2025
- Business
- New York Times
How to Avoid a Huge Customs Bill on a Cheap Online Order
A whole lot of items worth less than $800 are imported from overseas: Between October 2023 and September 2024, 1.36 billion de minimis shipments entered the US. But because those items weren't especially valuable, buyers didn't have to pay tariffs on them. 'It's crazy amounts of stuff,' said Lawrence Friedman, a Chicago-based attorney who has been practicing trade law for more than 30 years. 'The whole point of this de minimis exception has been that it is not worth the administrative trouble to collect this small amount of duties.' Now items made in China or Hong Kong sent via the international postal network are subject to a tax of either 54% of their value or a flat rate of $100 per postal item. Products shipped through services such as FedEx, DHL, and UPS are now 'subject to all applicable duties,' which, broadly speaking, means the current tariffs of 30% for products from China. In early May, those numbers were as high as 120% of their value for postal items and 145% for products shipped by courier, which is how we ended up with a $158 ukulele. I placed orders at AliExpress, Amazon Haul, Quince, Shein, and the aforementioned China-based headphones company to arrive at customs after the de minimis exemption was lifted. I also spoke to four international-trade attorneys, as well as representatives from US Customs and Border Protection, DHL, FedEx, and UPS, all to figure out: Who's on the hook for these bills? How much can you expect to pay? And how does this change online shopping? My haul for this article. Kimber Streams/NYT Wirecutter Many retailers are doing what they can to avoid passing on surprise fees to shoppers. Some have raised prices, added import fees at checkout, and promised not to charge buyers extra at delivery. One gaming-handheld maker, Retroid, has even offered to cover any unexpected customs charges. Temu and other retailers have paused shipments from China and limited fulfillment to US warehouses. Some companies, such as Quince, have rapidly moved manufacturing operations away from China. But despite everything retailers are doing to help, if the full fee isn't collected when you purchase an item, you could be on the hook for a customs bill at delivery. Here are a few simple steps you can take to shop wisely, and what your options are if you get a surprise bill. You don't have to worry about a customs bill unless your purchase is coming into the US from another country. If you buy something that ships locally from a US retailer — such as first-party purchases from Amazon, Best Buy, or Walmart — or a warehouse located in the US, the import fees have already been paid and are included in the price you pay at checkout. But it's easy to click that buy button without even thinking about it. Friedman, for example, recently purchased a new watch band and didn't realize it was shipped from Montreal until he received the FedEx shipping notification. 'This is my job, and I didn't even notice it was an imported watch band,' he said. To find out where a product ships from: Look for warehouse options. Some companies allow you to choose whether your order is shipped from a US warehouse or an international warehouse. Some companies allow you to choose whether your order is shipped from a US warehouse or an international warehouse. Check a company's shipping-policy page. It may say where a product ships from or contain information on warehouse locations for different regions. This page can also provide information on which shipping company the seller works with. It may say where a product ships from or contain information on warehouse locations for different regions. This page can also provide information on which shipping company the seller works with. Ask customer support. Take this step, but keep in mind that in our experience, some chat-support representatives didn't know the answer or provided inaccurate information. If you do this, save the conversation and order with a payment method that provides buyer protection in the event that you have to dispute unexpected charges. If your order is shipping internationally — from any country, not just China or Hong Kong — you should confirm where the product was made. The tariff is determined based on this, the country of origin, not the country from which it is shipped. So even if a product is shipped to you from Canada but made in China, as our ukulele was, these fees apply to your purchase. Unfortunately, finding out if a product is made in China can be tricky to impossible when you're shopping online. Here are two quick ways to check if a product was made in China: Search for 'China' and 'Hong Kong' on the product page. This information may be buried behind a drop-down or menu; using Ctrl+F can help. This information may be buried behind a drop-down or menu; using Ctrl+F can help. Ask customer support via email or chat. But again, the agent may not always have accurate information. Save a screenshot of the conversation in case you need it for a dispute. If you've determined that a product is made in China or Hong Kong — or if you haven't definitively proven that it isn't — look for tariff or import charges during the checkout process. You might not be happy to see those additional fees at purchase, but it's much better to know what you owe up front than to get a surprise bill weeks later. You may also see something called delivery duty paid (DDP) shipping, which means that duties will be covered by the shipper. In contrast, delivery duty unpaid (DDU) or 'tax unpaid' shipping means you're likely to owe the full amount of duties, brokerage charges, and other fees when your item is delivered. Magicx asked for my Tax ID during checkout but we don't recommend giving out your Social Security number to any retailer. Watch out for companies asking for your Tax ID — which, for individual shoppers, means your Social Security number — at checkout. This information is necessary to list you as the 'importer of record,' which means you're responsible for the duties. We also don't recommend giving any retailer your Social Security number. You can also contact customer support to ask who will be listed as the importer on the shipment — if it's you, you're legally responsible for the duties. Shipping carriers pay the tariff to get a package through US Customs. Then, if the fee hasn't already been covered up front by the seller, the carrier may pass it along to you at delivery. Even though the tariff numbers differ for packages that go through USPS versus couriers like DHL and UPS, the process is the same: The carrier will notify you before delivery that you owe duties and how much, and you have to pay in order for the carrier to release the package. (We reached out to FedEx, but it did not confirm its process.) An example of a customs bill we received from DHL for this article. If you expected a bill — perhaps your seller warned you at checkout that you'd be responsible for duties at delivery — and the amount looks correct, you can go ahead and pay it. We recommend looking at the paperwork provided by the shipping carrier to confirm that you haven't been stuck with any outsize administrative or brokerage fees. But if the bill is exorbitant or a surprise (or an exorbitant surprise), you have a few options: Ask the seller for help. First, contact the retailer you purchased from. It may be able to work with the shipping carrier to cover the charge. Some companies, like Retroid, have offered to cover these bills for their customers during this period of confusion. First, contact the retailer you purchased from. It may be able to work with the shipping carrier to cover the charge. Some companies, like Retroid, have offered to cover these bills for their customers during this period of confusion. Dispute the charge. If the seller can't or won't help, you can dispute the charge with the courier if you think the tariff or brokerage fees have been improperly calculated. Mistakes happen — these shipping companies are currently dealing with a lot of extra paperwork as a result of this de minimis change. If the seller can't or won't help, you can dispute the charge with the courier if you think the tariff or brokerage fees have been improperly calculated. Mistakes happen — these shipping companies are currently dealing with a lot of extra paperwork as a result of this de minimis change. Refuse the package. If you cannot or don't want to pay the fee, you may be able to refuse delivery. But you don't get your stuff, and depending on the seller's policy, you may be responsible for return shipping. You may not get a refund for your order, either. We've seen claims floating around that delivery companies will send unpaid customs bills to collections, but we haven't seen evidence of that happening. Shipping couriers have a contract with the shipper, not with the recipient. FedEx's and UPS's policies say that they try to collect customs fees from the recipient at delivery, but if the recipient doesn't pay, the shipper is responsible. While DHL says that recipients are responsible for duties, the company also provides instructions for how to refuse a package at delivery. If your package goes through USPS, though, that might be a different story. If you're listed as the importer of record on the shipment, you are responsible for the duties and processing fees owed to the US government. If you cannot or don't want to pay the fee, you may be able to refuse delivery. But you don't get your stuff, and depending on the seller's policy, you may be responsible for return shipping. You may not get a refund for your order, either. Make use of purchase protection. Some sellers — such as e-reader company Boox, for example — say they will not refund your order if you refuse to pay duties at delivery. But if you contacted customer support before purchasing and were told that the product was made in or shipping from a different country, you may be able to use buyer protection to get your money back. Think twice if you receive a text, email, or phone call about issues with a package that claims to be from DHL, FedEx, USPS, or another shipping carrier. This is a common scam used to steal personal and financial information, and scammers may try to take advantage of the current tariff confusion. If you're concerned about a delivery, check the package tracking with the company you ordered from and contact the shipping carrier directly — never tap or click a link in a text or email. Although I had no idea what would happen, I definitely didn't expect the lengths to which retailers would go to shelter me, a customer, from the effects of these changes. Without notifying me, Shein swapped my first international order to a local shipment to prevent fees. And even though Quince's chat support said that my sweater would ship from China, it was fulfilled from a local warehouse instead. Before the headphones company shipped my order, it emailed me with a warning about customs fees, a detailed breakdown of how much to expect, and an offer of alternative shipping options that would include duties. I had to confirm: Yes, I really did want these headphones and the 145% bill that was supposed to come with them. I'm lucky — the only surprise I got was a bill that was much lower than I expected. It's unclear whether the de minimis exemption will ever be reinstated — or if it will be closed for additional countries in the future — or what the tariffs on China will be on any given day. But if you follow our advice, you'll hopefully avoid a surprise bill. If you do get one, we want to hear from you: Email us at notes@ This article was edited by Caitlin McGarry and Jason Chen. Lawrence Friedman, partner at Barnes, Richardson & Colburn in Chicago, video interview, May 14, 2025 Josephine Aiello LeBeau, partner at Wilson Sonsini Goodrich & Rosati, video interview, April 29, 2025 Anne Seymour, senior counsel at Wilson Sonsini Goodrich & Rosati, video interview, April 29, 2025 Jahna Hartwig, of counsel at Wilson Sonsini Goodrich & Rosati, video interview, April 29, 2025 What I Cover I've been Wirecutter's resident laptop expert for more than a decade. In that time, I've tested hundreds of laptops—including ultrabooks, gaming laptops, Chromebooks, and budget Windows laptops—as well as thousands of keyboards, mice, and other peripherals.
Forbes
16-05-2025
- Business
- Forbes
Temu And Shein Still Caught In Crossfire Of De Minimis Shake-Up
The U.S. $800 de minimis exemption for goods imported from China has been reduced but not cancelled. ... More (Photo by Mostafa Bassim/Anadolu via Getty Images) China's ultra cheap fashion and general goods giants may be out of the tariff frying pan for now, but tougher rules over the de minimis tariff mean they could have been pushed into the fire. While the Trump administration announced a temporary trade deal Monday that slashed tariffs on Chinese goods to 30% from 145% for a 90-day period while talks continue, tariff rules that hit direct to consumer imports have also been cut in half, but a $100 flat-fee option has not been changed, the White House has explained. The de minimis tariff was initially understood to be left out of the wider deal, meaning a 120% tariff rate on shipments from China valued at less than $800, or a flat $100 fee per postal item, remained. However, the White House then released the full text of an executive order clarifying that the tariff rate had indeed been reduced to 54%, but still maintaining the $100 fee option. That means many imports of low cost orders from the likes of Temu and Shein have still been priced out by the modified rules. A Latin term that used to be little-known outside the world of customs, de minimis has become the buzz phrase of the current trade war — broadly translating as 'too small to matter' — and relates specifically to small packages shipped directly to consumers from abroad, usually bypassing the warehouses and distribution hubs used to ship to store. Such packages have been shipped in huge quantities to the U.S. by China's online discount powerhouses, especially as the $800 ceiling in the U.S. is high compared with many other countries,having been raised in the U.S. by President Barack Obama from $200 in 2016. In neighbor Canada it is about $40 and in Europe around $150. The exemption was originally designed to avoid unnecessary red tape expense wherby it could cost more to collect a duty than customs would receive from the tax revenues received. But with the threshold as high as it is in the U.S., around four million small packages claiming de minimis exemptions crossed into the U.S. daily last year, which has been exploited by low-cost exporters such as Temu and Shein. The packages are also thought to be one of the ways in which opoid drugs such as fentanyl have been smuggled into America – a huge area of focus for President Trump – and former President Joe Biden had also been looking at changing the de minimis rules during his administration. According to a White House fact sheet released in 2024, the number of individual shipments to the U.S. claiming de minimis exemptions annually exceeded more than a billion, up from around 140 million a decade before. Nomura Holdings estimated that around $46 billion of U.S.-bound packages came from China last year, double China's own reckonings, although that remains a small fraction of the value of total annual imports, which in 2024 were valued at over $5.3 trillion. Shein and Temu used the de minimis exemption to deliver direct to consumers. (Photo by RODRIGO ... More ARANGUA / AFP) (Photo by RODRIGO ARANGUA/AFP via Getty Images) The clampdown on the de minimis exemption for imports from mainland China and Hong Kong means products normally using the loophole are now being channeled through customs and are incurring levies, meaning ecommerce deliveries from China are also likely to become slower and elongate delivery times as exporters switch to shipping over air cargo. With so many changes to the tariff rates, implementation dates, and ongoing negotiations between the U.S. administration and a host of countries around the world, the picture remains unclear and subject to change – possibly huge change. That for now is leaving the likes of China's Shein and Temu in limbo, and India could be the big winner in the post-tariff fall out at the expense of some Southeast Asian production countries, according to Ken Pilot, founder of Ken Pilot Ventures, speaking at the World Retail Congress in London this week. 'My big concern is southeast Asia, I think they will feel a bit of a bump, when you look at our big ally the U.K. having tariffs of 10%, perhaps we'll see Vietnam finish up at 25-30%,' he said. 'I can see India being the big winner and a lot more production moving to India. However, the challenge now is with this tariff decrease, everyone is going to want to get a boat and prices for shipping might go to pandemic levels. Speed to market and not over-producing your products are critical.' For Shein and Temu, the de minimis debate goes on and for now at least shopping like a billionaire might mean you actually have to be a billionaire.
Free Malaysia Today
14-05-2025
- Business
- Free Malaysia Today
US slashes ‘de minimis' tariff on small China parcels to as low as 30%
China exported US$240 billion worth of goods under the de minimis rule globally in 2024, representing 7% of exports and 1.3% of GDP. (AP pic) HONG KONG : The US will cut the 'de minimis' tariff for low-value shipments from China to as low as 30%, according to a White House executive order and industry experts, further de-escalating a potentially damaging trade war between the world's two largest economies. The order published late on Monday offers some relief to big Chinese e-commerce players Shein and Temu and follows a weekend deal between Beijing and Washington to unwind for 90 days most of the tit-for-tat tariffs imposed on each other's goods since early April. While their joint statement following talks in Geneva did not mention the de minimis duties, the order signed by President Donald Trump said levies for those direct-to-consumer postal shipments will be reduced to 54% from 120% for items valued at up to US$800, starting on Wednesday. An alternative flat fee of US$100 per postal package remains in effect, but a planned June 1 increase to US$200 was cancelled. There are different rules for packages handled by commercial delivery firms such as United Parcel Service, FedEx and DHL, which shipped millions of Shein and Temu packages before Trump ended duty-free status for Chinese shipments valued under US$800. The rate for those packages now defaults to the reduced US tariff rate of 30% from 145% for Chinese imports, two delivery experts told Reuters on condition of anonymity for fear of retribution. The 30% rate reflects the Trump administration's decision to cut China's 'reciprocal' duty rate to 10% from 145%, plus a separate 20% duty related to the US fentanyl crisis. The White House and the US trade representative's office did not immediately respond to a request for clarification. Trade representative Jamieson Greer told CNBC on Tuesday that the 10% global duty rate would likely remain in place to help rebuild the US manufacturing base. Collection difficulties Commercial shippers generally collect duties from sellers in China prior to shipment, but the US Postal Service is not set up to handle tariff collections. Four sources told Reuters most Temu and Shein shipments are handled by commercial carriers. Many consumer goods from China in the commercial channel will still be subject to much higher duties imposed under previous trade actions or sectoral national security investigations. For example, syringes and surgical gloves are subject to 100% duties under a US Section 301 trade action. One of the delivery experts said, however, that if shipped by a postal carrier in quantities valued at less than US$800, they may be able to arrive in the US for only a US$100 fee, or an effective 12.5% rate. In February, Trump ended the de minimis exemption and imposed different rules for packages handled by postal services or commercial delivery firms – blaming the exemption for enabling a flood of shipments from Chinese e-commerce firms and traffickers of fentanyl and other illicit goods. The number of shipments entering the US through the tax-free channel exploded in recent years with more than 90% of all packages coming via de minimis. Of those, about 60% came from China, led by direct-to-consumer retailers such as Temu and Shein. According to 2024 congressional testimony from a US Customs and Border Protection official, the average value of a de minimis shipment during fiscal year 2023 was just US$54. Chinese online retailers Shein – which is considering a London stock market listing – and PDD Holdings-owned Temu, as well as US rival Amazon did not immediately respond to requests for comment. China exported US$240 billion in direct-to-consumer goods benefiting from de minimis worldwide last year, accounting for 7% of its overseas sales and contributing 1.3% of gross domestic product, according to Nomura estimates. Jianlong Hu, CEO of Brands Factory, a Chinese cross-border e-commerce consultancy, said a 54% tariff was still very high. 'Sellers are probably taking a wait-and-see approach but in general I think it's fair to say the boom times of small package delivery from China to the US, the Golden Age is already gone.' Shein is more exposed to de minimis changes due to its reliance on speed of getting thousands of new styles each week to consumers in the West by air than others such as Temu. Shein might still be one player that would want to send by air freight some packages from China and pay the 54% tariff rather than import all by boat, said Hu. 'If people are buying clothes on Shein and are told the product will arrive one month later, who will buy that?' Loophole China's yuan jumped to a six-month high against the dollar on Tuesday, joining a global rally in riskier assets following the broader trade deal between Beijing and Washington. Trump's global trade war, which shredded the playbooks that have governed international trade for decades, has shaken up financial markets and raised fears of a recession. The US de minimis rule, which dates back to 1938, has been the target of growing criticism from both Democratic and Republican lawmakers as a loophole that allows Chinese products to skirt US tariffs and illegal drugs and fentanyl precursors to enter the US unscreened, as Reuters reporting has confirmed.
ABC News
13-05-2025
- Business
- ABC News
Are fast fashion giants Temu and Shein really under threat from Trump's tariffs?
In early May, US shoppers woke to a different world. A rule allowing small parcels valued at less than $US800 to enter the US duty free from China had ended. Shein and Temu — the giants of ultra-fast fashion and cheap household goods — had e-commerce business models that thrived under the rule called the de minimis exemption. While the Latin term de minimis may mean "lacking significance", US President Donald Trump called the exemption "a big scam". The White House claims ending the exemption is critical to slowing the flow of illegal drugs which it says enter the US under the rule. Monday's trade deal between China and the US lowered tariffs but the de minimis exemption was not reinstated, Reuters reported yesterday. Some in the fashion industry have celebrated the end of the de minimis exemption as a welcome reprieve from the fast fashion juggernaut. Shein and Temu have been criticised for drastically reducing the time between purchase and landfill, poor working conditions and driving waste in the fashion sector. ThreadUp, an online platform for selling second-hand clothing in the US, applauded the end of the de minimis exemption. Calling it: "A critical step in addressing the unsustainable flow of ultra-fast fashion into the US." "We believe that making fast fashion more expensive will incentivise consumers to choose quality, durability, and second-hand options," the company statement said. The US Customs and Border Protection Agency estimated more than 4 million de minimis shipments entered the US on a daily basis. It was estimated Shein and Temu accounted for more than 30 per cent of the daily parcels shipped to the US under the de minimis exemption, according to a 2023 US Select Committee investigation. But rising prices and the chaos unleashed on the global fashion industry thanks to the US-China trade war could further harm sustainability initiatives in the fashion sector. Taylor Brydges, a research principal at the Institute for Sustainable Futures at UTS, says while the de minimis exemption was fundamental to the low costs Shein and Temu offer, she wouldn't "count these brands down and out". "They are incredibly agile and nimble and they have seen this coming," she says. Shein and Temu, platforms that connect customers with manufacturers, are looking to work with domestic American manufacturers and shifting their attention to European and Brazilian customers, Dr Brydges says. Reuters reported last week that Shein and Temu have boosted their spending on digital ads in Europe and Brazil. Shein and Temu raised prices for US customers in late April, and according to Bloomberg analysis both companies saw double-digit sales declines the following week. But trade experts told Reuters yesterday that the online retailers will likely adapt their businesses and "use the 90-day reprieve [in high tariffs] to bring in bulk shipments and restock their US warehouses". The e-commerce companies had already been reducing their reliance on de minimis and establishing local warehouses. How customers will react if price hikes in the US are sustained over time remains to be seen. There's a carelessness to the consumption of Shein and Temu products, Dr Brydges says: "You buy lots, it doesn't matter if it fits or how many times you wear it, you just give the charity shop or a friend or throw it out." But she says there's no guarantee price hikes would lead to more considered consumption. A Temu spokesperson told the ABC: "Temu helps Australians stretch their dollar by cutting out the middleman and offering affordable everyday goods. We're a platform for choice and value, supporting small businesses and enforcing strict standards on seller conduct." Temu did not respond to questions about concerns over labour conditions or waste. Shein was also contacted for comment. This week, the local fashion industry is celebrating Australian Fashion Week in Sydney. But behind the catwalks and photo ops, businesses are hurting. Jaana Quaintance-James, CEO of Australian Fashion Council (AFC), says many AFC members are dealing with "rising costs, cautious consumer spending and ongoing trade uncertainty". The end of the de minimis exemption will "disrupt the low-cost, high-speed model" fuelling the dominance of Shein and Temu in the US, Quaintance-James says. "With that market squeezed, they're likely to double down elsewhere — including Australia — raising the risk of even more aggressive tactics and a flood of poor-quality product being dumped into our market." The AFC is calling for a parliamentary inquiry into the impact of ultra-fast fashion on Australia's fashion industry. Quaintance-James says brands like Shein and Temu "undercut responsible brands with aggressive pricing strategies [and] for consumers facing cost-of-living pressures, the decision between price and principles can be difficult." In 2023, the AFC launched Seamless — a voluntary scheme where brands pay a 4 cents-per-garment levy to raise money for initiatives to reduce waste, establish a circular economy and reach net zero by 2050. Seamless now operates independently from AFC, but Quaintance-James says its members are encouraged to join the initiative. Nearly 60 brands of the more than 14,000 operating in the Australian market have signed up, Seamless CEO Ainsley Simpson says. Simpson says Seamless is calling for regulation: "Seamless is advocating for a level playing field, so all brands clothing Australians are held to account, be they large or small, fast or slow, Australian or international." Professor Ken Pucker, a fashion sustainability expert in the US, says while tariffs will likely slow consumption and could lead to higher used-goods sales, fashion's sustainability efforts may suffer even more. In an op-ed for The Business of Fashion, Pucker argues that "Trump's tariffs will assuredly make further decarbonisation progress next to impossible". He wrote that sustainability efforts were already decelerating before Trump's recent actions. Pucker put this down to sluggish growth that led to restructures and staff cuts, a lack of customer interest in green products, stretched resources and an investor backlash against "so-called woke capitalism". McKinsey analysis published in 2024 found two-thirds of fashion brands included in a study on fashion sustainability were behind on their own decarbonisation goals and "40 per cent had seen their emissions output increase since making their sustainability commitments". Pucker warns that brands under economic pressure from tariffs "might be tempted to cut corners on labour and climate initiatives". In general, he is critical of market-based voluntary action as the sole means to improve sustainability in fashion. He told the ABC: "Reducing the environmental impact of the industry will require a host of new rules." This includes extending producer responsibility laws and fees to cover infrastructure to create a circular economy, taxes on polyester and carbon, and financial support (from the taxes raised) to aid supplier decarbonisation. "Fashion remains one of the least regulated industries, where promises of voluntary action [like adopting circular practices, driving eco-efficiency] have proven to be weak responses in light of continued unit growth," he says.
