Former President Donald Trump has signed executive orders imposing new tariffs that will close a long-standing trade provision heavily utilized by Chinese e-commerce giants Temu and Shein. The orders, set to take effect Tuesday, target the "de minimis" rule that allows packages valued under $800 to enter the U.S. duty-free.
The de minimis provision, in place since the 1930s, has become a cornerstone of Chinese retailers' business models in recent years. U.S. Customs data shows de minimis shipments skyrocketed from 139 million in 2015 to over 1.3 billion in 2024, enabling companies like Temu and Shein to offer ultra-low-priced goods to American consumers.
The new tariffs will impose a 10% duty on Chinese imports and 25% on goods from Canada and Mexico. This move follows growing concerns about the provision's impact on U.S. businesses and product safety. The Biden administration had previously attempted to address what it called "overuse and abuse" of the system in September 2023.
Both Temu and Shein have already begun adapting their strategies. Temu has started working with U.S.-based warehouses, while Shein has established distribution centers within American borders. Shein's executive chairman, Donald Tang, has publicly supported reforming the de minimis system, stating it needs a "complete makeover."
The changes could benefit established U.S. marketplace operators like Amazon, eBay, and Etsy. Amazon recently launched its own bargain platform called Haul, reportedly utilizing the same de minimis provision for direct shipments from China.
The impact of these new tariffs could reshape the landscape of online retail, particularly affecting the business models of Chinese e-commerce platforms that have gained substantial market share through ultra-low pricing strategies.