The tariff exemption for low-value packages from China ended on Friday, meaning online shoppers will soon feel President Donald Trump’s tariffs tangibly.
Trump’s blanket 145% tariff against Chinese goods came with a “de minimis exemption,” a law that waived tariffs on packages under $800. The end of the exemption on Friday will cause prices for goods on Chinese online shipping outlets such as Temu to skyrocket, one of the tariff’s most obvious consequences.
The change could be a major political risk for Republicans, given the impact inflation had on the 2024 election.
While Trump has worked to bring down inflation on products such as eggs, he suggested that tariffs on luxury products such as toys could be beneficial.
“I told you before, [China is] having tremendous difficulty because their factories are not doing business. They made a trillion dollars with Biden … selling this stuff. Much of it we don’t need,” Trump said on Wednesday. “You know, somebody said, ‘Oh, the shelves are going to be empty’. Well, maybe the children will have two dolls instead of 30, and maybe the two dolls will cost a couple of bucks more than they would normally.”
He then argued that cheap goods weren’t worth the economic cost.
“But we’re not talking about something that we have to go out of our way — they have ships that are loaded up with stuff, much of which — not all of it, but much of which we don’t need. And we have to make a fair deal,” Trump said.
Treasury Secretary Scott Bessent has echoed similar points, saying, “Access to cheap goods is not the essence of the American dream.”
Congress passed the de minimis exemption in 1938, with lawmakers reasoning that screening and collecting duties on low-value packages wasn’t worth the time and effort. The Trump administration had to reverse its first removal of de minimis after it was found that Customs and Border Protection couldn’t efficiently process all the items. The Department of Commerce is developing a system to process all the low-value packages from China, which was estimated to be operational by Friday, according to Politico.
“U.S. Customs and Border Protection (CBP) certainly has a huge task on its hand,” a CBP spokesperson said in a statement. “However, the agency is uniquely positioned to implement and enforce the president’s tariffs using all our enforcement and revenue collection authorities.”
With the end of the exemption, online shopping outlets such as Temu, Shein, Etsy, and The Knot have scrambled to respond. Temu and Shein have posted notices blaming tariffs for increased costs, with the former displaying “import charges” that massively increase prices.
Amazon was reportedly ready to add “import charges” to receipts, which the Trump administration criticized.
“This is a hostile and political act by Amazon,” White House press secretary Karoline Leavitt told reporters Tuesday morning. “Why didn’t Amazon do this when the Biden administration takes inflation to the highest level in 40 years? And I would also add that it’s not a surprise because, as Reuters recently wrote, Amazon has partnered with a Chinese propaganda arm. So this is another reason why Americans should buy American.”
Shortly after, it was reported that Amazon founder Jeff Bezos and Trump spoke on the phone, and the “import charges” were removed.
Etsy and The Knot have urged sellers to avoid products from China altogether and to seek domestic alternatives instead.
Cheap Chinese shipping outlets have drastically increased their sales in the United States in recent years, with CBP data showing U.S. imports of low-value packages skyrocketing from $5.3 billion in 2018 to $66 billion in 2023.
The new tariffs against China, which Scott Bessent portrayed as a de facto “embargo,” have already begun to damage China’s economy, pushing Beijing to warm to trade negotiations.
In a statement, China’s Commerce Ministry said it was “evaluating” U.S. offers to begin negotiations but first insisted that the U.S. cancel its tariffs on Chinese goods, according to the New York Times.
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“If the United States does not correct its wrong unilateral tariff measures, it means that the United States has no sincerity at all and will further damage the mutual trust between the two sides,” the ministry said.
Beijing and Washington have considered scaling back some tariffs on certain goods to minimize economic harm. Both appear confident in victory, and many analysts believe Beijing is waiting for the domestic turmoil to force Trump to fold first.
