A long-standing trade loophole that enabled certain online retailers to ship goods into the U.S. without taxes or import duties has been officially closed, signaling a major shift in international commerce.
The policy change, enacted through an executive order, eliminates the de minimis exemption for products from a key global exporter, fundamentally altering the way low-cost goods reach American consumers.
This exemption had fueled explosive growth in direct-to-consumer shipping, accounting for a vast majority of imports entering the U.S. every day. Customs and Border Protection previously reported handling around 4 million such shipments daily, underscoring the significant impact of this policy shift.
Consumer watchdog groups have expressed support for the change, noting that the previous system lacked comprehensive oversight. Many shipments under the de minimis threshold bypassed thorough documentation requirements, raising concerns about the influx of unsafe consumer products, illicit goods, and unauthorized food imports.
Understanding De Minimis
De minimis, a Latin term meaning “trifling or of little importance,” was originally introduced in the U.S. Tariff Act of 1930 to exempt small-value imports from taxation. Over time, it became a critical component of international trade, especially as e-commerce flourished.
Over the past decade, the volume of these duty-free shipments surged from 140 million in 2014 to over 1 billion by 2023. The exemption threshold, once set at $200, was raised to $800 in 2016, making it one of the highest in the world. For comparison, the European Union maintains a lower limit of 150 euros (approximately $156).
Items qualifying under de minimis were previously exempt from duties and taxes, benefiting from expedited clearance processing. Advocates for the policy have argued that it streamlined commerce and kept prices low for consumers. However, critics contended that it allowed foreign businesses to undercut domestic retailers unfairly, enabling the proliferation of low-cost, low-quality imports.
The move to end this exemption aligns with broader efforts to reform trade policies and strengthen regulatory oversight. Even before the latest executive order, proposals had been introduced to close perceived loopholes, addressing concerns over mislabeling, tax evasion, and the illicit shipment of restricted substances under the guise of everyday goods.
With this new directive in place, the landscape of international trade and online shopping is set for a major transformation. While challenges remain, this decision reflects a broader push towards fairer competition, enhanced consumer protection, and a more secure trade environment.