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The loophole has been labeled “a big scam” by Trump, and its expiration can increase prices for millions of shipments to American shoppers.
The loophole has been labeled “a big scam” by Trump, and its expiration can increase prices for millions of shipments to American shoppers.
Uncertainty looms
Since “Liberation Day” on April 2nd, the global trade market has been thrown into a whirlpool of uncertainty, as President Donald Trump imposed sweeping tariffs on pretty much every country in the World.
The suspension
The same day as the tariffs took effect, Trump announced a 90 days supension on all tariffs – except for the ones on China, which is set at a staggering 145 percent.
The Loophole
But if you haven’t experienced any skyrocketting prices yet, it might have to do with your shopping habits. The de minimis exemption is a legal loophole allowing goods worth less than $800 USD to be imported into the U.S. duty free.
More than 80 percent of American e-commerce
The Loophole allowed Americans to get their shopping fix from sites like Temu, Shein, AliExpress and countless American sites without feeling the pinch of the tariffs. According to congressional research report, more than 80 percent of American e-commerce shipments in 2022 were de minimis imports.
The Loophole has expired
However, the de minimis exemption-loophole expired one minute after Thursday turned into Friday, meaning the 145 percent tariffs on Chinese goods can now potentially make the prices more than double for American shoppers.
The carriers are ready – but what about the shoppers?
Carriers such as USPS, FedEx and DHL say they are prepared for the changes, but wether the shoppers are ready for the new normal is a whole other question.
Low-income Households set to suffer
Research made in February by UCLA and Yale economists show that 48 percent of de minimimis packages are shipped to the poorest zip codes in the US. Only 22 percent were shipped to the richest.
Warning from Shein and Temu
Temu and Shein, two of the biggest Chinese supplies of cheap everyday goods have already raised their prices ahead of the expiration of the loophole, meaning several goods have already seen an increase in prices.
Nearly 4 million shipments every day
The US Customs and Border Protection told CNN that nearly 4 million de minimis shipments enter the US every day, and the majority of the shipments come from Hong Kong and China.
Trump: “It’s a big scam”
POTUS called the expiration of the loophole “a big deal” during a Cabinet meeting Thursday, adding that the deminimis expemtion is “a big scam”.