US President Donald Trump has only dealt a blow to the embattled e-commerce industry, which is still caused by the tariffs announced in the spring. On Wednesday, Trump signed an executive order that expanded the impact of these tariffs and made it more expensive for Americans to buy foreign products on sites such as eBay, Etsy and Amazon.
The order eliminates the so-called “minimis” clause, a long-term policy that allows people in the United States to import packaging worth less than $800 from anywhere in the world without duty. The White House released a fact sheet that said the parcels would now be subject to the same tax rate as large shipments.
Trump has moved away from the minimum exemption for Chinese goods earlier this year. The president’s new executive order is now removed for other countries starting August 29. Until then, experts say many foreign sellers and U.S. companies with offshore warehouses will scramble to bring their goods to the U.S. “A lot of sales are expected as brands try to clear their overseas inventory over the next 30 days,” Aaron Rubin, CEO of logistics company Shiphero, said in a social media post.
There are some temporary exceptions for packages made through the International Postal Network, which means goods that private companies like DHL or FedEx cannot handle. Since it’s difficult for customs officials to easily calculate the value of these packages, at least for now, their fixed tariff rates are between $80 and $200 per item. The Trump administration said that this special tariff rule will expire in six months, when all goods will be taxed based on country-specific tariffs that Trump has begun negotiations with various countries such as Japan.
The De Minimis exemption was originally designed to allow our travelers to bring home gifts and items purchased abroad for personal use without obligation. But as the e-commerce industry flourishes, the rule also makes it cheaper and more effective for Americans to order goods online from around the world. Until this year, overseas sellers often used trade loopholes to send packages directly to the homes of American consumers at very low costs. According to U.S. Customs and Border Protection, the United States receives an average of 4 million De Minimis cargoes per day.
Some of the biggest beneficiaries of the policy are Chinese e-commerce platforms such as Shein and Temu, which systematically use De Minimis transportation to keep prices low and also build supply chains that can respond to consumer demand in real time. They were the first victims of Trump’s tariffs when Trump revoked exemptions from parcels from China when he issued an executive order in April.
When the tax exemption ended, some analysts feared that it would be an extinction-level threat to Chinese e-commerce sites, but they learned to adapt and resume normal operations most of the time. However, Temu and Shein did raise prices for many products to calculate the additional costs of the new tariffs.
