President Donald Trump signed an executive order to end the de minimis trade loophole, effective May 2.

Currently, shipments valued below US$800 enter the US duty-free, but under the new policy, items previously exempt will incur a 30% duty or US$25 per item, whichever is higher.

This duty will rise to US$50 per item on June 1. The change comes after delays in February due to logistical challenges faced by US Customs, retailers, and delivery companies.

The de minimis provision has fueled growth for Chinese ecommerce platforms like Temu and Shein in the US. In 2024, US Customs and Border Protection (CBP) processed over 1.3 billion shipments under this exemption.

Critics argue the loophole benefits Chinese retailers unfairly and facilitates the entry of counterfeit and unsafe goods.

Temu and Shein have expanded their US operations to address these concerns, with Temu using US warehouses and Shein opening distribution centers in several states.