U.S. Closes Import Loophole, Targeting Low-Cost Goods from China

On Wednesday, President donald Trump took a notable step by signing an executive order aimed at closing a trade loophole that previously allowed inexpensive packages from China and Hong Kong to enter the United States without incurring duties.

Starting May 2 at 12:01 a.m. Eastern Time, the de minimis exemption for shipments valued at $800 or less will be eliminated. This change is poised to affect online retailers such as Shein and Temu,which have thrived on shipping goods directly to American consumers without tariff costs.Now, if these items are not sent via the international postal system, they will be subject to standard duties. For those that are shipped through postal services, there will be a flat fee of either 30% of the item’s value or $25 per item—whichever amount is higher. After June 1, this fee will increase to $50.

Initially announced on Febuary 1 but temporarily halted due to logistical challenges, this order has now been set in motion with confirmation from Commerce Secretary Howard Lutnick that systems are ready for tariff collection. A source close to the situation noted that “they figured it out,” indicating readiness for enforcement against Chinese imports exploiting this loophole.

Under the new regulations, carriers must provide detailed shipment data to U.S. Customs and Border Protection (CBP), maintain an international bond for payment assurance, and adhere to a specific duty payment schedule. Additionally, CBP retains authority over requiring formal entry for any shipment—even those qualifying under the new flat fee structure.

The previous exemption led to an overwhelming influx of packages into America—1.4 billion last year alone—with over 90% entering duty-free; around 60% of these came from China specifically.

Trump linked this decision with efforts against the fentanyl crisis in america by attributing part of its escalation to Chinese suppliers who allegedly use small parcels as conduits for synthetic opioids. The White House stated: “President Trump is targeting deceptive shipping practices by Chinese-based shippers who often conceal illicit substances within low-value packages.”

In about three months’ time, there’s expected feedback regarding how effectively this rule is functioning and whether it might extend its reach into Macau as well.

This move reflects broader concerns about global trade practices while also addressing domestic issues like drug trafficking—a complex interplay between commerce and public health that continues shaping policy discussions today.