Closure of US De Minimis Loophole Set to Impact Online Retail Prices

Sat Oct 25 2025 04:53:31 GMT+0300 (Eastern European Summer Time)

President Trump is about to close a significant duty-free loophole which has allowed Chinese e-commerce titans like Shein and Temu to offer low prices to US consumers, leading to a surge in costs across the board.

As the US government prepares to implement changes to the de minimis exemption, which allows low-value packages to enter the country duty-free, online shoppers may soon face increased prices and a shift in the market landscape.

The Trump administration is set to enforce new rules that will end the "de minimis" exemption allowing low-value packages to be imported into the US without incurring taxes or duties. This change predominantly affects online retail giants like Shein and Temu, which have capitalized on the exemption to deliver competitively priced goods to American consumers.

Historically, the de minimis rule (originally established in 1938) has permitted items valued at less than $800 to enter the US without additional charges, which has resulted in a massive increase in such shipments—over 1 billion packages last year alone. However, both Trump and former President Biden have raised concerns that the rule has been exploited for shipping illegal goods, particularly synthetic opioids like fentanyl.

With the impending change, set to take effect on May 2, US Customs and Border Protection reports that imports from mainland China and Hong Kong will now be subject to import duties. Shein and Temu have already announced that they would adjust their pricing strategies in anticipation of higher operational costs due to this legal shift.

This closure of the loophole is not solely a domestic issue. Similar regulatory reviews are underway in the UK and European Union, indicating a wider trend of reassessing low-value import rules to protect local businesses. The consequences of these new tariffs could translate to annual consumer costs in the billions, according to estimates.

Experts have voiced skepticism regarding the effectiveness of the closure in combating drug smuggling, as the majority of illegal substances reportedly enter the US from its southern border. Furthermore, the burden placed on border officials may increase as they adapt to the changes.

In a rapidly evolving global marketplace, consumers can expect a notable shift in the availability and pricing of imported goods. As duty-free imports dwindle, the competitive landscape may shift, prompting online shoppers to rethink how they approach purchasing from international retailers.