President Donald Trump signed an executive order on Wednesday to close a trade loophole that allowed cheap packages from China and Hong Kong to enter the U.S. without paying duties.
The change ends the de minimis exemption for shipments worth $800 or less, starting May 2 at 12:01 a.m. Eastern. This move could have a major impact on online retailers like Shein and Temu, which rely on sending goods directly to U.S. shoppers without paying tariffs.
For shipments not sent through the international postal system, these goods will now be hit with regular duties. If they are sent through the postal system, they’ll face a flat fee of either 30% of the item’s value or $25 per item, whichever is more. That fee will go up to $50 after June 1.
Trump first signed an order to end the exemption on February 1 but paused it a week later due to logistical issues. “They figured it out,” a source familiar with the decision said. “De minimis is being stripped from China.”
The White House said the decision was made after Commerce Secretary Howard Lutnick confirmed that systems are in place to collect the necessary tariffs.
Carriers must now report shipment details to U.S. Customs and Border Protection, keep an international bond to guarantee payment, and pay duties on a set schedule. CBP can also require formal entry for any shipment, even if it qualifies for the new flat fee.
The exemption has led to a flood of packages into the U.S.—1.4 billion last year alone, with more than 90% entering duty-free. Around 60% of those came from China.
Trump tied the move to the fentanyl crisis, blaming Chinese suppliers for fueling synthetic opioid shipments through small parcels. “President Trump is targeting deceptive shipping practices by Chinese-based shippers, many of whom hide illicit substances, including synthetic opioids, in low-value packages to exploit the de minimis exemption,” the White House said.
A report assessing how the new rule is working and whether it should be expanded to include Macau is due in 90 days.