Big changes are coming for online shopping — and if you’ve ever felt squeezed by ultra-cheap, fast-fashion hauls or knockoff products flooding the market, this one’s for you.
The U.S. has officially shut down the 100-year-old de minimis loophole, a rule that allowed 1.36 billion packages from China to enter the country duty-free in 2024 alone. For platforms like SHEIN and Temu, which relied on this exemption to ship cheap goods directly to consumers, this marks a massive shake-up. With the imposition of the new 10% tariff, these retail giants — and sellers importing from China — are facing skyrocketing costs and logistical challenges.
No more watching competitors undercut you with suspiciously cheap goods while dodging the fees you had to pay. The loophole’s closure means everyone will now play by the same rules — no more free rides for foreign sellers dumping inventory into the market.
Let’s dive into the details and what this policy means for you!
What is The De Minimis Loophole?
The de minimis loophole was a law dating back to the 1930s that allowed foreign goods valued under $800 to enter the U.S. without customs declarations, tariffs, or duties. This means that items like clothing, gadgets, and home goods could be sold at very low prices, benefiting companies like SHEIN and Temu, which have taken advantage of the system and whose products have been flooding the U.S. market for a while now.
Chinese platforms thrived under rule, sending packages directly from overseas manufacturers to American consumers. It wasn’t small-scale, either — over 1.36 billion packages entered the U.S. duty-free from China in 2024 alone, up from just 139 million in 2015. That’s an increase of nearly tenfold in less than a decade — and proof of how much this loophole was exploited.
Think about it: Chinese companies used this loophole to offer incredibly low prices on clothes, gadgets, and home goods. Many customers loved getting amazing deals (even if it came at a cost of good quality), but for local retailers like you, it was a different story. While you had to pay taxes, tariffs, and cover higher costs of running your business, chinese companies didn’t have to pay any of that, making it harder for you to compete. But now, that loophole is gone — and things are about to change for everyone.
What Changed?
Trump’s executive order officially shuts down this de minimis exemption for Chinese goods. Now, every package — no matter how cheap — will have to follow the regular tariff rules. On top of that, a new 10% tax on Chinese imports is taking effect this week, adding yet another cost layer.
This is a major shake-up, especially for online stores like SHEIN and Temu, whose business depends on shipping products directly from factories in China to customers without extra fees. The infamous problem is now in trouble: a simple T-shirt from China will not only get hit with the new 10% tax but also face other tariffs that have been in place since Trump’s first term. These added costs will make it much harder for them to keep their famously low prices.
How Does This Affect Amazon Sellers & Shoppers?
This policy doesn’t just affect Amazon sellers — it will hit everyday shoppers, too. People who have grown used to cheap and fast deals will start to feel the impact when cheap products start disappearing due to higher shipping costs.
As a result, some shoppers may switch to U.S.-based sellers, which could be good news for local businesses, while others may simply cut back on online shopping altogether.
1. Higher Prices For Everyone
It’s not just online sellers who will feel the strain — American consumers are also bracing for higher costs. Studies estimate that these changes could add about $690 per year to the average household’s expenses. Shoppers who rely on low-cost platforms, especially those with tighter budgets, may find their favorite deals disappearing.
On the other hand, reducing the flood of cheap imports from China could give a boost to U.S. manufacturing. Trump’s larger trade strategy — including a proposed 25% tax on goods from Canada and Mexico — shows a strong push to bring more production back to the U.S. While this shift will take time, businesses looking to get ahead might start exploring local sourcing options now.
2. Logistics Bottlenecks Everywhere
With the U.S. Postal Service halting shipments from China, expect major delays in deliveries. Whether you sell through Amazon’s FBA program or use third-party warehouses, stricter customs checks will slow things down. Many sellers are already looking for U.S.-based suppliers to avoid these disruptions, but for now, expect longer wait times and logistical headaches.
What Does This Mean for Platforms Like SHEIN and Temu?
The effects on Chinese e-commerce platforms will be massive. These companies became popular by shipping products directly from overseas to U.S. customers without paying import taxes. But now, that business model no longer works.
Temu is already making changes, with reports suggesting it may shut down some warehouses and shift its operations. SHEIN, on the other hand, might try importing products in bulk to save money. However, reorganizing global supply chains is a complicated process — it won’t happen overnight, and there will be disruptions along the way.
It’s not just SHEIN and Temu facing challenges — Amazon is also feeling the heat. The company’s Amazon Haul marketplace, created to compete with Temu, also relies on importing low-cost items under the $800 tax-free limit. Now that this loophole is gone, even Amazon could struggle with rising costs and shipping delays.
How This Affects You as an Amazon Seller
In short, you’ll have fewer ultra-cheap, tax-free competitors driving prices down, but there’s more to consider.
1. Fewer Low-Cost Competitors
The first major shift you’ll notice is fewer low-cost items undercutting your pricing. Infamous Temu and SHEIN, which relied heavily on this loophole, are now subject to tariffs and duties when shipping to the U.S. This will make their once unbeatable pricing less sustainable.
For instance, Temu and SHEIN accounted for over 30% of de minimis imports, according to customs data. Without that advantage, their influence on the market is likely to shrink.
2. Higher Costs for Imported Goods
If you source your products from China, this change could hit your bottom line. Previously, items under $800 could bypass import taxes, but now they’ll be subject to tariffs.
Most Amazon sellers operate on thin profit margins — around 15% — so these added costs could significantly cut into earnings. If your business depends on Chinese imports, now is the time to reconsider your suppliers and pricing strategy to stay competitive.
3. Shipping Delays and Logistics Problems
As if higher costs weren’t enough, shipping is also about to get messier. The U.S. Postal Service has temporarily stopped accepting packages from China and Hong Kong, partly because of these new trade rules.
Why? Packages now require customs inspections, creating a backlog in the shipping process. The result? Much longer delivery times for imported goods. If your business relies on shipping directly from overseas, expect delays that could frustrate customers and impact your seller performance.
Final Thoughts
The end of the de minimis loophole is a big shift for e-commerce, but it also brings new opportunities. If your business relies heavily on imports, you’ll likely feel the impact first. However, sellers who focus on the U.S. market may actually benefit as fewer ultra-cheap imports flood the marketplace.
In the short term, there will be challenges — higher costs, shipping delays, and an unpredictable global trade landscape. But looking ahead, this change could make things easier for sellers like you, especially if you’ve been struggling to compete with extremely low-priced imported goods.
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FAQ
What Is The De Minimis Exemption?
The de minimis exemption is a trade rule that allows small shipments (valued under a certain threshold) to enter a country without being subject to import duties or taxes. In the U.S., this threshold was set at $800, meaning goods below this value could be imported duty-free. However, recent policy changes have ended this exemption for goods from China.
What Is The De Minimis Definition in International Trade?
In international trade, de minimis refers to the minimum value of a shipment that is exempt from customs duties and taxes. The idea behind this policy is to reduce customs processing for small, low-value shipments, making cross-border trade faster and more efficient.
What Were The De Minimis Benefits for Businesses and Consumers?
The de minimis benefits primarily included:
1. Lower costs: Businesses and consumers could buy inexpensive products from overseas without paying extra import taxes.
2. Faster shipping: Packages under the de minimis threshold moved through customs quickly, reducing delivery times.
3. Easier access to global markets: Small businesses and online sellers could import goods affordably, allowing for competitive pricing.
What Is The De Minimis Tax, and How Does It Affect Imports?
The de minimis tax refers to the import duties and tariffs that would normally apply to goods if they exceed the de minimis threshold. Previously, Chinese goods under $800 avoided these taxes, but now all imports — regardless of value — will be subject to standard tariffs. This change will likely result in higher prices for imported products.
How Does The End of De Minimis Shipping Impact Consumers?
De minimis rule allowed companies like SHEIN and Temu to send low-cost goods directly to U.S. customers without import taxes.
Now that the exemption is gone, these businesses will have to pay tariffs on every shipment, which will likely lead to higher prices, longer shipping times, and potential supply chain disruptions.
Why Was The De Minimis Exemption Removed For China?
The exemption was removed as part of U.S. trade policy changes aimed at reducing reliance on Chinese imports and boosting domestic manufacturing. Lawmakers also argued that the rule gave Chinese sellers an unfair advantage over American businesses by allowing them to avoid taxes and undercut local prices.
