International trade, both physical and online, is being shaken by Donald Trump‘s tariff policy. In the latest chapter of a series of perplexing shifts on how he wants his country to approach trade relations, Trump has signed an executive order that completely eliminates the tariff exemption known as “de minimis”, a fundamental pillar for millions of cross-border transactions.
Although the suspension for products from China and Hong Kong was already in effect since May 2, the new order extends the prohibition to the rest of the world, marking the definitive end of an era.
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De minimis refers to a monetary reference threshold that establishes an exemption from tariff payments if the value of the imported goods is below it. In the case of the United States, the de minimis exemption applied to shipments with a value of up to $800.
The existence of de minimis not only simplified customs procedures for low-value shipments but was also one of the cornerstones upon which the businesses of large Chinese marketplaces like Temu or Shein were built. These platforms base their strategy on offering products at extremely low prices, and until now, de minimis allowed them to avoid tariffs and maintain this pricing policy in the US market.
The new order, which will come into effect on August 29, implies that any package imported into the United States, regardless of its value or country of origin, will be subject to tariffs and import duties. For a sector accustomed to the fluidity of direct-to-consumer trade, this measure is an earthquake with profound logistical and financial implications.
Trump’s executive order does not establish a single fixed tariff but defines two methodologies for calculating them. The final amount will depend on the product’s country of origin and the shipping method. Thus, from August 29, for shipments that previously benefited from the “de minimis” exemption, the following tariffs will apply:
This is the default long-term tax, and it will be a percentage of the total value of the product. This percentage, known as the “effective IEEPA tariff rate”, varies by country of origin and product category. For example, a T-shirt from a specific country might have a 15% tariff on its value, while an electronic component from another country might have a 25% tariff.
For the first six months, carriers may choose to charge a fixed fee per package, instead of a percentage. This fee is based on the tariff level of the country of origin:
It’s important to remember that this fixed-fee option is temporary. After six months, all shipments must comply with the “ad valorem” calculation method.
As mentioned, the “de minimis” exemption was key to the explosive growth of platforms like Shein and Temu in the US. Their business model was based on the efficiency of sending millions of individual low-cost packages directly from their origin logistics centers, without incurring significant customs costs.
According to the White House, this practice had become a serious problem. The executive order signed by Trump is justified based on three main concerns:
Beyond the case of the Chinese marketplaces mentioned, this new regulation represents a very significant change in the rules of the game for any eCommerce player. For the small Spanish seller who sends their products to the United States, for example, the change means the inclusion of additional costs and greater logistical complexity, which could reduce their margins and competitiveness.
It’s a rather logical consequence: tariffs will make their products more expensive, which is very relevant for those who compete on price. This could diminish demand and force these sellers to pass on costs to consumers or absorb them, affecting their profitability.
But as we said, it also complicates things logistically: managing millions of daily shipments under new customs rules, including new tariffs and declaration processes, could create significant bottlenecks and delivery delays, a critical factor for customer satisfaction. In this context, it seems logical that companies with more possibilities consider diversifying their operations, seeking production sources in other countries or even investing in local production or local warehouses in the United States.
However, as we mentioned, the biggest impact is expected on large players who depend on the economies of scale of the “de minimis” model. Companies like Temu and Shein are forced to completely re-evaluate their pricing strategy and supply chain. In fact, after the announcement of the suspension of this exemption for Chinese products in May, several of these companies were forced to rethink their strategies and even increase their prices. Likewise, these measures have also impacted US companies that marketed low-cost Chinese products, such as Amazon and its Amazon Haul service.
In Temu’s case, the Chinese-origin marketplace decided to suspend product shipments from China to the United States. Now, those accessing Temu in the United States, can only buy products from local sellers whose warehouses are in the country, as items shipped from China appear as out of stock. The platform has stated that the prices of products from US merchants remain unchanged in any way.
It’s worth noting that Temu was the most downloaded retail app worldwide in 2024, surpassing prominent competitors like Amazon, AliExpress, and Shein. Therefore, it will be interesting to pay attention to its evolution in the coming months and the effect that the new direction it has had to take in the US may have on its results.
It’s difficult to know how international trade will change after such a significant measure, but the repercussions may not be limited to the US market. With the new tariffs in the US, large producers of low-cost goods (mainly from China) will no longer find it as easy to enter that market. This could lead these companies to redirect their enormous production volume to other markets, such as Europe, where “de minimis” regulations may still be more flexible.
The result could be a significant increase in competition for local sellers (for Spanish ones, in our case). And that could accelerate events: by flooding the market with even cheaper products than those already existing, national sellers could be pressured to lower their prices, affecting their profit margins.
In 2024, 4.6 billion low-value shipments (goods costing less than €150) entered the market of the European Union, representing 12 million packages per day. These data double those recorded in 2023 and triple those of 2022. Likewise, it should be noted that 91% of these shipments came from China.
In addition to raising environmental and competition concerns regarding European retailers, the European Commission highlights that many of these products do not comply with European legislation.
Given this situation, the European Union has been studying the elimination of its own de minimis for some time, although in this context they do not receive this name. The EU’s objective is to curb and regulate the massive import of low-value shipments (goods not exceeding €150), which are exempt from tariffs.
To this end, it has been proposed to suspend the duty exemption for packages under €150 and strengthen control capabilities through data exchange and risk assessment. In addition, the creation of a non-discriminatory management fee for eCommerce shipments imported directly by consumers from outside the EU, regardless of their origin or value, is also being considered.
Other proposed measures include: conducting coordinated controls between customs and market surveillance authorities; strengthening compliance with regulations such as the GDPR, the DMA, or the DSA; implementing the Digital Product Passport; promoting the adoption of the Ecodesign Regulation for Sustainable Products and the amendment of the Waste Directive; launching awareness campaigns and strengthening collaboration with trade partners.
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