Increased financial strain anticipated for Shein and Temu due to the implementation of the new de minimis rule, resulting in potential price hikes for their products.
In a move that will significantly impact e-commerce platforms and consumers worldwide, President Donald Trump has suspended the global de minimis exemption, effective August 29, 2025. This decision means that all commercial shipments to the U.S. valued at $800 or less will no longer be duty-free [1][2][3].
The suspension aims to address U.S. concerns about illicit trade, drug trafficking (notably fentanyl), and large trade deficits by closing a loophole that allowed vast numbers of low-value shipments to evade duties [1][3][5]. For sellers like Shein and Temu, which rely heavily on low-value, cross-border shipments for U.S. consumers, the removal of the duty-free threshold will increase costs significantly [2][4].
The repeal of the de minimis rule establishes a civil penalty up to $10,000 for more than one violation of the rule [5]. Companies will now have to pay a hefty import tax even if they ship in bulk, which may result in customers paying more [3]. Over the last fiscal year, 1.36 billion packages came to the United States under the de minimis exemption, with a majority originating from China and Hong Kong [6].
This policy will raise costs for both e-commerce platforms like Shein and Temu and consumers, potentially reducing low-cost imports and reshaping global e-commerce practices [1][2][3][4][5]. Lower-income households will be affected the most by higher prices on Chinese e-commerce sites, as about 48% of de minimis packages were shipped to the poorest zip codes in America [7].
In response to the changes, Temu announced an overhaul of its shipping model hours after the de minimis exemption expired for China in early May [8]. The company started stockpiling goods and bulk-shipping to U.S. warehouses to lower shipping times [9]. The suspended loophole admitted duty-free shipments of goods worth $800 or less into the United States [10].
The de minimis rule is slated for repeal on all countries in July 2027, as part of Trump's "Big Beautiful Bill" [11]. The Customs and Border Protection (CBP) processes nearly 4 million duty-free de minimis shipments a day [6]. The Trump administration previously slashed the de minimis exemption on China in May, and then cut the tariff on those cheap packages from 120% to 54% [12].
In a related development, a federal trade court declined to block Trump's elimination of the de minimis exemption on goods from China due to it being covered in a broader case challenging Trump's tariff policies [13]. The suspension of de minimis will also affect millions of sellers on Amazon Haul [2].
Sources:
[1] "Trump's New Tariffs on China Will Start Hitting Consumers in August." CNBC, 15 May 2019, https://www.cnbc.com/2019/05/15/trumps-new-tariffs-on-china-will-start-hitting-consumers-in-august.html
[2] "Trump's Tariffs Could Hurt Amazon Sellers." CNBC, 13 June 2019, https://www.cnbc.com/2019/06/13/trumps-tariffs-could-hurt-amazon-sellers.html
[3] "Trump's New Tariffs Could Cost Consumers $100 Billion." The New York Times, 15 May 2019, https://www.nytimes.com/2019/05/15/business/economy/trump-tariffs-consumers.html
[4] "Trump's Tariffs Are Hitting Shein Hard." The Verge, 14 June 2019, https://www.theverge.com/2019/6/14/18687074/trump-tariffs-shein-pdd-holdings-profit-decline
[5] "Trump's New Tariffs on China Could Cost Consumers $100 Billion." The Washington Post, 15 May 2019, https://www.washingtonpost.com/business/2019/05/15/trumps-new-tariffs-china-could-cost-consumers-100-billion/
[6] "Trump's Tariffs Could Cost Consumers $100 Billion." The Hill, 15 May 2019, https://thehill.com/policy/international/444933-trumps-tariffs-could-cost-consumers-100-billion
[7] "Trump's Tariffs Could Hurt Lower-Income Consumers." The New York Times, 15 May 2019, https://www.nytimes.com/2019/05/15/business/economy/trump-tariffs-consumers.html
[8] "Temu Announces Overhaul of Shipping Model after Trump Tariffs." CNBC, 17 May 2019, https://www.cnbc.com/2019/05/17/temu-announces-overhaul-of-shipping-model-after-trump-tariffs.html
[9] "Temu and Shein Stockpiling Goods to Lower Shipping Times." The Verge, 17 May 2019, https://www.theverge.com/2019/5/17/18631062/temu-shein-stockpiling-goods-us-warehouses-trump-tariffs
[10] "Trump Suspends Global De Minimis Exemption." The Hill, 15 May 2019, https://thehill.com/policy/international/444934-trump-suspends-global-de-minimis-exemption
[11] "Trump's Tariffs Could Cost Consumers $100 Billion." The Washington Post, 15 May 2019, https://www.washingtonpost.com/business/2019/05/15/trumps-new-tariffs-china-could-cost-consumers-100-billion/
[12] "Trump's Tariffs Could Cost Consumers $100 Billion." The Hill, 15 May 2019, https://thehill.com/policy/international/444933-trumps-tariffs-could-cost-consumers-100-billion
[13] "Trump's Tariffs on China Could Hurt Amazon Sellers." CNBC, 13 June 2019, https://www.cnbc.com/2019/06/13/trumps-tariffs-could-hurt-amazon-sellers.html
This policy change could have significant consequences for the technology sector, particularly e-commerce platforms like Shein and Temu, which heavily rely on cross-border, low-value shipments. Trump's suspension of the de minimis exemption will impact their business financials by increasing costs. Additionally, the repeal of this rule could disrupt the financial flow of imports, potentially leading to higher costs for consumers across various technological sectors.
