US ends de minimis exemption allowing tariff-free low-value shipments

An executive order signed by President Donald Trump said packages valued at or under $800 sent to the United States outside of the international postal network will now face ‘all applicable duties’ beginning August 29.

The Trump administration targeted packages from China and Hong Kong earlier.

The tax and spending bill, also known as the One Big Beautiful Bill Act (OBBBA), recently signed by Trump repealed the legal basis for the de minimis exemption worldwide starting on July 1, 2027.

"Trump is acting more quickly to suspend the de minimis exemption than the OBBBA requires, to deal with national emergencies and save American lives and businesses now," a White House factsheet said.

Goods shipped through the postal system now will face one of two tariffs: either an ad valorem duty equal to the effective tariff rate of the package's country of origin or, for six months, a specific tariff of $80 to $200 depending on the country of origin's tariff rate.

Praising the decision, the National Council of Textile Organizations (NCTO) said it marks a significant milestone for all its efforts to repeal this harmful provision in US trade law.

“For eight years, NCTO has led critical efforts to close the de minimis backdoor pipeline for cheap, subsidised, and often illegal, toxic and unethical imports—half of which are estimated to be textiles and apparel. Every day, 4 million de minimis packages flood into the US, undermining American manufacturing, evading inspection, and allowing forced labour-made goods from Xinjiang, China as well as illicit fentanyl to reach consumers unchecked,” NCTO president and chief executive officer Kim Glas said.

The executive order is “a game changer. It restores fairness for US manufacturers, closes a major gateway for illegal and toxic goods, and lays the groundwork for reinvestment and job creation here at home,” she added.

Hailing the decision, the National Cotton Council of America (NCC) said the move addresses a critical issue that has undermined fair trade and the competitiveness of American industries, including the cotton and textile sectors.

“Ending the de minimis loophole levels the playing field and strengthens our domestic supply chains,” NCC chairman Patrick Johnson said in a statement.

ALCHEMPro News Desk (DS)