U.S. Ends De Minimis Exemption for China: Tariffs Up to 145% Impact Shein, Temu, and Other Ecommerce Platforms

On April 25, 2025, the U.S. ended the de minimis exemption for low-value imports from China and Hong Kong, impacting ecommerce platforms like Shein and Temu. The change, enacted by an executive order from President Donald Trump, imposes tariffs up to 145% on packages under $800, previously duty-free. This policy shift aims to curb illicit imports and protect domestic businesses, affecting cross-border ecommerce, logistics, and consumer prices. Temu halted U.S. deliveries from China, while Shein adjusted pricing to include tariffs, reflecting significant industry adjustments.

What Is the De Minimis Exemption?

The de minimis exemption, codified in Section 321(a)(2)(C) of the Tariff Act of 1930, was originally designed to streamline customs operations by waiving duties on low-value shipments. In 2015, Congress raised the threshold to $800, allowing millions of small packages to enter the U.S. each day without tariffs or extensive customs processing. In fiscal year 2024 alone, nearly 1.4 billion shipments entered the U.S. under this exemption, with the vast majority originating from China and Hong Kong.

Why the Policy Changed

The Trump administration cited multiple reasons for ending the exemption for China and Hong Kong. Chief among them was the role of de minimis shipments in facilitating the illicit import of synthetic opioids, including fentanyl precursors. According to U.S. Customs and Border Protection (CBP), 97% of intellectual property infringement-related seizures in 2024 involved de minimis shipments. The administration also pointed to the surge in low-cost imports from Chinese ecommerce platforms, which it argued undermined domestic retailers and manufacturers.

The executive order, initially issued in February 2025, was temporarily paused due to logistical concerns. The U.S. Postal Service halted shipments from China for a day, overwhelmed by the sudden change. After a brief delay to allow CBP and commercial carriers to prepare, the policy officially took effect on May 2, 2025.

Implementation and Tariff Structure

Under the new rules, all shipments from China and Hong Kong—regardless of value—are now subject to tariffs of up to 145%. Commercial carriers like FedEx, UPS, and DHL are responsible for collecting these duties before goods are shipped. The U.S. Postal Service has the option to charge a 120% tariff or a flat fee of $100 per shipment, which is scheduled to increase to $200 on June 1.

CBP has stated it is prepared to handle the increased inspection volume and revenue collection. However, industry groups such as the International Mailers Advisory Group have expressed concerns about potential bottlenecks and delays in customs processing.

Impact on Ecommerce Platforms

The end of the de minimis exemption has had an immediate and profound impact on ecommerce companies that rely on direct-to-consumer shipping from China. Temu, owned by Chinese tech giant Pinduoduo, has halted U.S. deliveries of China-shipped products and is now displaying only “local” inventory to American shoppers. The company also introduced a detailed breakdown of import charges in its checkout process.

Shein, now headquartered in Singapore, has responded by adjusting its pricing to include tariffs. A banner on its U.S. site now reads, “Tariffs are included in the price you pay. You’ll never have to pay extra at delivery.” The company began implementing these changes on April 25, ahead of the official policy enforcement.

Other retailers, including some Amazon third-party sellers, have started displaying tariff surcharges in shopping carts to help consumers understand the added costs. Amazon itself has not yet implemented a site-wide display of tariff-inclusive pricing.

Logistics and Customs Challenges

The policy shift has placed new burdens on logistics providers and customs officials. Parcel carriers must now collect duties and ensure compliance with more detailed customs declarations, including the origin of each product component. This added administrative load is expected to cause delays and increase shipping costs.

CBP has the discretion to require formal entry for de minimis shipments, which involves more extensive paperwork and inspection. While the agency claims it is ready, the scale of the task—processing millions of packages daily—raises questions about long-term feasibility.

Broader Industry Adjustments

The removal of the de minimis exemption is forcing businesses that built their models around low-cost Chinese sourcing to reevaluate their operations. Some are exploring alternative supply chains, while others are considering shifting fulfillment to U.S.-based warehouses to avoid the new tariffs.

Chinese exports of low-value packages to the U.S. surged from $5.3 billion in 2018 to $66 billion in 2023, according to the Congressional Research Service. The new tariffs are expected to significantly reduce this volume. Container traffic from Chinese ports to the U.S. has already begun to decline, and air cargo carriers are bracing for further disruptions.

Consumer Implications

For American consumers, the most immediate effects are higher prices and potential delivery delays. Products that once arrived quickly and cheaply from China now face added costs and longer customs processing times. Retailers are passing on some of these costs to shoppers, either through higher sticker prices or added fees at checkout.

The policy change may also reduce the variety of low-cost goods available online, particularly in categories like clothing, electronics accessories, and home goods—sectors where platforms like Shein and Temu have been dominant.

U.S. Ends De Minimis Exemption for China: Tariffs Up to 145% Impact Shein, Temu, and Other Ecommerce Platforms

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