Trump ends tax-free shipping for small packages from China, shaking up Shein and Temu

On Wednesday, April 2, US President Trump announced a new round of tariff plans in the Rose Garden of the White House, which include baseline tariffs, retaliatory tariffs, and automobile tariffs. Additionally, Trump signed an executive order to close a tariff loophole previously exploited by Chinese e-commerce companies such as Shein and Pinduoduo’s Temu.

Trump signed an executive order on Wednesday to permanently terminate the tariff exemption for small parcels valued under $800 from China and Hong Kong, known as the “de minimis exemption,” starting on May 2. The White House stated that if these small parcels enter the US through international postal networks, they will be subject to all applicable tariffs. Goods valued under $800 sent through international postal networks will be subject to a tariff of 30% of their value or $25 per item (increasing to $50 per item after June 1, 2025).

According to the White House, US Customs and Border Protection may require postal parcels to go through formal entry procedures. In such cases, they will be subject to all applicable tariffs, duties, and fees.

Furthermore, under Trump’s executive order on retaliatory tariffs, once a “sufficient system is established to comprehensively and rapidly process and collect tariff revenue for affected imported goods,” other countries imposing tariffs on American goods will also have their “de minimis exemption” canceled when importing goods to the US. However, this tariff exemption still applies to qualifying goods and gifts carried during travel.

The “de minimis exemption” allowed parcels valued under $800 to enter the US duty-free, benefiting Chinese e-commerce companies like Shein and Temu by shipping products directly from Asian factories to US consumers, reducing transportation costs and inventory. Small brand businesses that rely on delivering goods from China to the US or reselling Chinese products also utilize this policy.

The Trump administration, members of Congress, and officials from US Customs and Border Protection are all opposed to this trade policy largely due to illicit items entering the US through low-cost parcels. The White House stated in the announcement regarding the cancellation of the “de minimis exemption” for parcels from China and Hong Kong, “President Trump’s goal is to address deceptive shipping practices by Chinese shippers, many of whom conceal illegal substances (including synthetic opioids) in low-value parcels to exploit the minimum exemption policy.”

Earlier this year, the Trump administration attempted to eliminate the “de minimis exemption,” but due to a backlog of parcels needing inspection at airports, temporary tariff collection was challenging. The government had to postpone the exemption until the Department of Commerce and Customs and Border Protection could devise appropriate inspection measures.

The Department of Commerce subsequently developed a plan to “comprehensively and rapidly process and collect tariffs.”

On Wednesday, the White House announced that the Department of Commerce has declared it has “established an adequate system to collect tariffs for low-value international goods.”

According to data from US Customs and Border Protection, around 1.36 billion batches of goods using the “de minimis exemption” entered the US in the 2024 fiscal year, up from 637 million batches four years ago.

On Wednesday, Trump also imposed a 34% retaliatory tariff on Chinese goods, resulting in Chinese imports facing a 54% tariff starting from April 9.