{"id":39883,"date":"2025-07-10T11:15:00","date_gmt":"2025-07-10T11:15:00","guid":{"rendered":"https:\/\/www.lifeandnews.com\/articles\/?p=39883"},"modified":"2025-07-11T06:15:38","modified_gmt":"2025-07-11T06:15:38","slug":"that-20-dress-direct-from-china-now-costs-30-after-trump-closed-a-tariff-loophole-and-the-us-will-soon-end-the-de-minimis-exemption-for-the-rest-of-the-world-too","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/that-20-dress-direct-from-china-now-costs-30-after-trump-closed-a-tariff-loophole-and-the-us-will-soon-end-the-de-minimis-exemption-for-the-rest-of-the-world-too\/","title":{"rendered":"That $20 dress direct from China now costs $30 after Trump closed a tariff loophole \u2013 and the US will soon end the \u2018de minimis\u2019 exemption for the rest of the world, too"},"content":{"rendered":"\n

Vivek Astvansh<\/a>, McGill University<\/a><\/em><\/p>\n\n\n\n

Fast fashion got a lot pricier for Americans<\/a> this spring \u2013 and it\u2019ll likely get even more expensive in 2027.<\/p>\n\n\n\n

That\u2019s because the Trump administration has been rolling back a little-known feature of U.S. customs law that for years had allowed retailers to ship packages duty-free to U.S. shoppers \u2013 as long as each shipment was valued under US$800. Known as the \u201cde minimis\u201d exception<\/a>, this rule had helped keep prices low on Chinese e-commerce platforms such as Shein and Temu, boosting their popularity<\/a> with American shoppers.<\/p>\n\n\n\n

But as of May 2, 2025, that advantage disappeared \u2013 at least for China and Hong Kong<\/a>. That\u2019s when the U.S. officially eliminated the exemption for low-priced imports from those places. Suddenly, cheap fashion wasn\u2019t so cheap anymore \u2013 and demand for Shein and Temu plummeted<\/a>.<\/p>\n\n\n\n

But while bargain hunters might hope for workarounds by ordering from platforms based in Vietnam or elsewhere, that\u2019s a temporary fix. The exemption is set to be eliminated for all countries<\/a> in 2027, thanks to language in the tax and spending bill just signed into law<\/a>.<\/p>\n\n\n\n

But hold up \u2013 what\u2019s \u201cde minimis,\u201d anyway?<\/p>\n\n\n\n

Cheap dresses and \u2018petty matters\u2019<\/h2>\n\n\n\n

I\u2019m a professsor of marketing<\/a> who\u2019s long been interested in this loophole<\/a>. De minimis is short for de minimis non curat lex,<\/em> which means, \u201cThe law does not concern itself with petty matters.\u201d In trade terms, the de minimis exemption refers to a value threshold below which imports can enter a country without duties. Imagine the government saying, \u201cIt\u2019s so cheap we won\u2019t even bother with it.\u201d<\/p>\n\n\n\n

The de minimis exemption was introduced as part of the Tariff Act of 1930<\/a> and was initially set at $200. It stayed at that level until 2016<\/a>, when the U.S. bumped it up to $800. Raising the limit helped small companies as well as individual shoppers, and from 2016 to 2023 de minimis shipments skyrocketed \u2013 rising sixfold<\/a> to more than 1 billion annually.<\/p>\n\n\n\n

But it left large companies, which import items in bulk, at a disadvantage. That\u2019s one reason why, historically, the same dress might cost more money in a U.S. retail store than it would if you bought it online from an e-commerce company.<\/p>\n\n\n\n

A case study: Your $20 Shein dress<\/h2>\n\n\n\n

Imagine it\u2019s January 2025. You\u2019re scrolling Shein, and you spot a trendy dress priced at $20. You order the dress to be delivered to your home. The seller packs your dress and exports it to your home address. The package arrives at the U.S. border. Because the package\u2019s \u201cvalue\u201d \u2013 specifically, the price you paid \u2013 is below the U.S. \u201cde minimis\u201d threshold of $800, the U.S. Customs and Border Protection exempts the importer \u2013 that is, you \u2013 from paying any import duty. You pay just $20.<\/p>\n\n\n\n

Now imagine you\u2019re trying to order the same dress in mid-July.<\/p>\n\n\n\n

Executive Order 14256<\/a>, issued on April 2<\/a>, states that such an item, if shipped via international mail from China or Hong Kong, could be subject to an ad valorem duty<\/a> of up to 20% of the item\u2019s value, or a specific dollar amount per package, which could be $100 or more. This was increased to 30% on April 8<\/a> and 84% the following day<\/a>. In the most recent modification, dated May 12<\/a>, the percentage has been revised to 54%.<\/p>\n\n\n\n

So, using the 54% ad valorem duty as an example, the import tariff on your $20 dress would be $10.80 \u2013 costing you $30.80 in all. Of course, the May 12 modification comes with the usual disclaimer: It will stay in effect \u201cunless and until otherwise modified by a subsequent executive action<\/a>.\u201d<\/p>\n\n\n\n

For millions of American shoppers, this is a wake-up call: Formerly tax-free fast fashion is now significantly more expensive. Thrifty shoppers might be tempted to buy from sellers in India or Mexico, where the de minimis exemption is still in effect \u2014 at least for now<\/a>. The One Big Beautiful Bill Act ends the de minimis exemption globally starting July 1, 2027<\/a>.<\/p>\n\n\n\n

Trade policy has been unpredictable under President Donald Trump, and the de minimis rule has been no exception<\/a>. But with the global end of the exemption now written into law<\/a>, its future seems a little more certain. Although it\u2019s always wise to watch for new developments from the White House<\/a>, I suspect the U.S. de minimis exemption may soon be a thing of the past.<\/p>\n\n\n\n

Vivek Astvansh<\/a>, Associate Professor of Quantitative Marketing and Analytics, McGill University<\/a><\/em><\/p>\n\n\n\n

This article is republished from The Conversation<\/a> under a Creative Commons license. Read the original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Vivek Astvansh, McGill University Fast fashion got a lot pricier for Americans this spring \u2013 and it\u2019ll likely get even more expensive in 2027. That\u2019s because the Trump administration has been rolling back a little-known feature of U.S. customs law that for years had allowed retailers to ship packages duty-free to U.S. shoppers \u2013 as […]<\/p>\n","protected":false},"author":56,"featured_media":39884,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5,826,277,46,295,10,25,296,27,4],"tags":[16637,5432,3364,1542,224,3749,3934,885,891,886,860,2775,546,15878,2946],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/39883"}],"collection":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/users\/56"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/comments?post=39883"}],"version-history":[{"count":1,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/39883\/revisions"}],"predecessor-version":[{"id":39885,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/39883\/revisions\/39885"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media\/39884"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=39883"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=39883"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=39883"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}