President Donald Trump has signed an executive order aimed at closing the “de minimis” loophole, which allowed a flood of low-value packages from China and Hong Kong to enter the U.S. without duties.
The order, effective May 2, was signed in the White House Rose Garden, coinciding with the introduction of broader tariffs on global trading counterparts.
As reported by Reuters, the administration’s move followed Commerce Secretary Howard Lutnick’s confirmation that systems are adequate for tariff revenue collection on these shipments. Goods from China and Hong Kong, previously entering duty-free if valued at $800 or less, will now attract applicable taxes.
For shipments within this value range through postal services, new duty rates will apply: either 30% of their value or $25 per item, increasing to $50 after June 1. An earlier executive order attempting to close the de minimis route was paused due to logistical challenges, but officials have since resolved these issues.
The abrupt increase in duty-free entries reached about 1.4 billion packages last year, with Chinese retailers like Temu and Shein dominating the space. Over 90% of incoming packages leverage de minimis, with China constituting approximately 60%.
Trump has linked the crackdown on Chinese imports to his campaign promise to address the synthetic opioid crisis. Chinese suppliers are believed by U.S. officials to sell raw materials to Mexican cartels that manufacture these deadly drugs—a claim China denies.
Postponements in February were attributed to insufficient preparation time, causing bottlenecks at U.S. ports. Now, carriers must coordinate with U.S. Customs and Border Protection (CBP) for duties and maintain appropriate bonds as part of the new compliance measures. The White House also indicated that the Commerce Secretary will review the Order’s impact within 90 days and consider extending it to packages from Macau.
