U.S. Closes Tariff Loophole on Chinese Imports — But Leaves a Back Door Open

In a major move aimed at tightening trade restrictions on China, the White House officially closed a longstanding tariff loophole for low-value imports—known as the de minimis exemption—effective May 2, 2025. The policy change ends duty-free treatment for packages valued at $800 or less if they're shipped from China, a benefit that had been heavily used by online retailers like Shein, Temu, and even Amazon.

President Trump, in a recent Cabinet meeting, called the loophole a “scam” that unfairly undercut U.S. businesses. “It’s a big deal,” he said. “We’ve ended it.”

While this marks a significant shift in trade policy, experts say the impact could be muddied by another decision made by the administration: a quiet waiver of a customs rule that could make enforcing the new tariffs extremely difficult. Specifically, the White House waived the requirement for formal customs entry—inspections and paperwork—for shipments valued between $250 and $2,500, even if they’re subject to penalty tariffs. This affects a wide range of goods covered under Trump’s broader tariff hike announced in April.

Trade experts warn that this waiver undermines the enforcement of the very tariffs that were just put into place. Lori Wallach, director of Rethink Trade, said the rollback will “gut enforcement and collection,” and questioned the administration’s commitment to truly cracking down on Chinese imports.

Economists also weighed in on the likely impact for consumers. While the new tariffs might not show up in inflation data, shoppers could still feel the sting. “It’s a visible price increase to many U.S. consumers—a reminder that they, not exporters, pay trade tariffs,” said Paul Donovan, an economist at UBS. Gregory Daco of EY echoed the concern, noting that low-cost retailers will face tighter margins and may have to pass costs along to customers.

Meanwhile, Chinese exporters are already adapting. According to Gabriel Wildau, a China expert at Teneo, companies may reroute shipments through countries like Mexico and Canada, which are still eligible for the de minimis benefit. In other words, the tariffs might be easy to dodge unless stronger enforcement measures are introduced.

This isn’t the first time Trump has tried to scrap the de minimis rule. A similar effort earlier this year was quickly reversed after it caused chaos at ports due to a lack of infrastructure to process the influx of tariffable shipments.

The move comes amid ongoing tensions between the U.S. and China. Although there were signs of a softening tone from Beijing last week, no new trade negotiations have been announced. Treasury Secretary Scott Bessent reportedly called the current trade relationship “unsustainable,” but for now, both sides appear to be waiting on the other to make the next move.

Useful Links for Further Reading

• https://www.bbc.com/news/articles/cwy79j2n7d4o

• https://www.dw.com/en/trump-tariffs-50-nations-seek-new-us-trade-talks/live-72156081

• https://www.bloomberg.com/news/newsletters/2025-05-05/effort-to-close-de-minimis-us-tariff-loophole-could-get-messy

• https://www.cbsnews.com/news/temu-halts-shipments-to-us-from-china-de-minimis-tariffs/

• https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-president-donald-j-trump-closes-de-minimis-exemptions-to-combat-chinas-role-in-americas-synthetic-opioid-crisis/

• https://www.cbsnews.com/news/de-minimis-exemption-end-date-tariff/

• https://www.theguardian.com/us-news/2025/may/02/why-is-trump-ending-de-minimis-tariff-loophole-low-value-goods