Jul 31, 2025 (MarketLine via COMTEX) --
US President Donald Trump has issued an executive order that will eliminate the duty-free exemption treatment, known as the "de minimis" threshold, for imports valued at less than $800, effective 20 August 2025.
Signed on 30 July 2025, this move expands upon an earlier presidential action that ended the de minimis exemption for goods from China and Hong Kong, with other countries initially remaining unaffected.
Goods transported via the international postal system will now be subject to duties determined by one of two methods: Ad valorem duty and Specific duty.
Ad valorem duty will be equivalent to the effective tariff rate under the International Emergency Economic Powers Act (IEEPA) relevant to the product's country of origin and will be levied on the value of each package.
Specific duty will vary between $80 to $200 per item, based on the IEEPA tariff rate that applies to the country where the product originated.
The de minimis provision, also referred to as Section 321, has been instrumental in facilitating e-commerce and small international trade transactions by permitting duty-free entry into the US without requiring a formal customs declaration.
However, the surge in such shipments has reportedly posed challenges for Customs and Border Protection in screening out illegal substances, counterfeit items, products made with forced labour, and other contraband.
According to Whitehouse Factsheet, the number of de minimis shipments arriving in the US surged from 134 million to more than 1.36 billion from 2015 to 2024.
On a daily basis, Customs and Border Protection (CBP) processes over four million de minimis shipments.
Even from countries not typically associated with high levels of de minimis abuse, there has been a dramatic increase in shipment volumes this year.
As of 30 June fiscal year 2025, there have been 309 million shipments compared to the total of 115 million for the entire previous fiscal year, leading to substantial revenue losses for the US, the factsheet noted.
The National Council of Textile Organizations (NCTO), which represents the US textile industry from fibre production to finished sewn products, expressed support for the decision.
The de minimis packages that enter the US bypass inspections and potentially introduce goods made with forced labour in Xinjiang, China and illegal fentanyl into the market, according to NCTO president and CEO Kim Glas.
Kim Glas said: aEURoeFor eight years, NCTO has led critical efforts to close the de minimis backdoor pipeline for cheap, subsidised, and often illegal, toxic and unethical importsaEUR"half of which are estimated to be textiles and apparel.
aEURoeThe de minimis mechanism has functioned as a black box for low-cost, subsidised, and unethical Chinese imports and undermined the competitiveness of the US textile industryaEUR"a key contributor to the workforce and the US economy.aEUR
The National Cotton Council of America (NCC) also expressed support for the executive action. The organisation views this measure as a response to a problem that has compromised fair trade and the competitive edge of American industries, notably those in the cotton and textile sectors.
aEURoeThis executive action is a positive step for American manufacturing and agriculture,aEUR said Patrick Johnson, NCC chairman.
aEURoeEnding the de minimis loophole levels the playing field and strengthens our domestic supply chains. We appreciate the Trump AdministrationaEUR(TM)s efforts to increase our global competitiveness.aEUR
But Neil Saunders, analyst at GlobalData, said US consumers would likely bear the brunt of this move.
"The removal of all de minimis means that US consumers will have to pay tariffs and duties on any order shipped to them from overseas. While the big Chinese marketplaces have already been affected, this will now extend to packages sent by smaller overseas sellers outside of China. The sellers themselves will not need to pay the duty, but the effectively higher costs for US consumers may deter them from ordering.
"If they only operate domestically, US retailers may welcome the decision as it effectively makes overseas competition more expensive."
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COMTEX_467693350/2227/2025-07-31T09:46:00
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