Legal Battle Advances Over Small-Package Duty Exemption

A legal battle is unfolding over President Donald Trump’s decision to eliminate a U.S. policy that previously exempted low-value packages from China from tariffs. As reported by various sources, this move has sparked important controversy.

A federal judge recently rejected the Justice Department’s plea to delay proceedings regarding the “de minimis” tariff exception while broader discussions about Trump’s global tariff increases continue. For now, these tariffs remain in place.

This exemption allowed packages valued at $800 or less to enter the U.S. without incurring tariffs. The termination of this rule particularly affects discount retailers like Temu and Shein Group Ltd., which specialize in affordable clothing and household items shipped directly to American consumers. However, it also poses risks for small businesses within the U.S.

In one notable case, auto parts distributor Detroit Axle claims that revoking this exemption could lead them to lay off hundreds of employees or even shut down operations by month’s end if they don’t receive a timely court ruling.

The Justice Department contends that Detroit Axle is not justified in demanding immediate action since they delayed filing their lawsuit against the executive orders in question; they argue it would be more prudent for the court to wait until other related cases are resolved before addressing Detroit Axle’s situation.

The legal team representing detroit Axle insists on expedited proceedings specifically concerning the small-value import exemption while also contesting Trump’s overall tariff increases as exceeding his authority under U.S. law.

The administration has yet to respond formally but has defended Trump’s executive actions regarding trade policies in other instances.

A federal appeals court recently allowed Trump’s global “reciprocal” tariffs—currently set at 10% for most major trading partners—to take effect temporarily after pausing an earlier ruling that deemed his use of an economic emergency law inappropriate for imposing such levies.

The Court of international Trade plans to conclude briefings on Detroit Axle’s request regarding reinstating the de minimis exception by early July, indicating a potential ruling just as Detroit Axle anticipates exhausting its pre-tariff inventory and facing severe financial repercussions.

An appeals court is expected to make a decision soon about whether these tariffs will remain blocked during ongoing legal disputes over their validity.

This case is officially titled axle of Dearborn v. Department of Commerce, 25-cv-91, within the U.S. Court of International Trade.