Trump tariffs take aim at trade loophole used by Chinese online retailers like Temu and Shein
President Donald Trump's tariffs against China, Canada and Mexico target a trade provision that helped fuel the explosive growth of budget online retailers, including Temu and Shein.
Trump on Saturday signed executive orders imposing tariffs on the country's top three trading partners. Goods imported from Canada and Mexico will be slapped with a 25% tariff, while goods from China will be charged a 10% tax. Energy resources from Canada will have a lower 10% tariff.The duties are expected to take effect on Tuesday.
The orders against China, Canada and Mexico all halt a trade exemption, known as "de minimis," which allows exporters to ship packages worth less than $800 into the U.S. duty free.
The de minimis provision has existed since the 1930s, but its use has come under increasing scrutiny in recent years. The Biden administration took steps last September to curb the "overuse and abuse" of de minimis, arguing it has helped Chinese e-commerce companies undercut competitors with lower prices. Officials have also argued that de minimis shipments are "subject to minimal documentation and inspection," raising product safety concerns.
The U.S. processed more than 1.3 billion de minimis shipments in 2024, according to data from the U.S. Customs and Border Protection agency. That's up from 139 million a year in 2015, the CBP said.
The loophole has enabled low-cost e-commerce companies like PDD Holdings-owned Temu, Shein, and Alibaba's AliExpress, which all have links to China, to offer a virtual smorgasbord of cheap apparel, household items and electronics, such as $15 smartwatches and $3 shoes.
Shein and Temu have gone on a digital marketing blitz over the last few years in an attempt to lure more deal-hungry shoppers. Temu in 2024