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The exemption was shut down last year by President Trump based, in part, on the same legal grounds as the tariffs that were invalidated by the Supreme Court.
Meaghan Tobin
Reporting from Taipei, Taiwan
Hours after the Supreme Court struck down a significant portion of President Trump’s tariffs, the White House announced that another key pillar of his trade agenda will remain in place: the end of a policy that had allowed billions of dollars of low-value imports to enter the United States tax-free.
That policy, known as the de minimis exemption, had let U.S. importers bring in goods valued at under $800 without the sender paying taxes or completing detailed customs paperwork. The loophole allowed millions of packages to come straight from Chinese factories to American homes duty-free. Mr. Trump has said the exemption also enabled deadly synthetic opioids like fentanyl and their ingredients to flow into the United States.
The exemption was used mostly by companies operating in China, just as American shoppers were getting hooked on buying inexpensive items online and the Chinese government was pushing its manufacturers to find buyers overseas. First on platforms like eBay and Amazon, and then on apps like Shein and Temu, exporters funneled the products of China’s vast manufacturing supply chain straight to the United States. Many American businesses also relied on the exemption for goods sold on sites like Etsy and Shopify.
The exemption, intended to spare customs officials from spending too much time and money processing goods of relatively little value, existed for almost a century. The threshold has changed repeatedly over the years and was raised from $200 to $800 in 2016.
Mr. Trump ended the exemption for products from China last May and for items from the rest of the world in July.
Although it did not address de minimis directly, the Supreme Court’s decision appeared to invalidate one of the legal grounds for Mr. Trump’s decision to end the exemption, potentially opening the door for such inexpensive tax-free shipments to resume.
But in an executive order hours later, Mr. Trump said the flow of such goods remained a national emergency, and an independent issue from the basis for other tariff actions. The loophole would remain closed, the order said.
The order claimed the same legal authorities as previous executive orders on the de minimis issue. The order did not directly address the court’s ruling.
These actions add to the complexity that businesses around the world have faced over the past year, as the Trump administration has dismantled the rules that previously governed global trade.
Alex Durante, a senior economist at the Tax Foundation, a think tank that generally favors lower taxes, said the confusion over de minimis adds another challenge for businesses that have already adjusted to repeated changes in tariff policy over the past year.
“There’s still this looming tariff uncertainty in general,” Mr. Durante said. “In some senses, it’s even worse now.”
Song Guoyou, an expert on U.S.-China economic relations at Fudan University in Shanghai, said the Supreme Court’s decision will likely boost some Chinese exports to the United States. The overall tariff on goods from China is expected to come down because the ruling invalidated, for example, the so-called fentanyl tariff that added 10 percent to the overall duties on Chinese imports.
However, Mr. Song said that Chinese businesses are still grappling with the unpredictable, shifting nature of the Trump administration’s trade policies.
“For Chinese enterprises, the policy uncertainty of the Trump administration always exists,” he said.
Separately, the sweeping legislation to extend tax cuts and slash social safety net programs, which Mr. Trump referred to as the “big, beautiful bill” signed into law last July, will do away with the previous law that had established the de minimis exemption starting in July 2027.
Chinese retailers are also facing tougher policies in the European Union, which plans to impose a flat fee on packages worth under 150 euros beginning in July.
E-commerce stocks went up on Friday after the Supreme Court issued its decision. Etsy ended the day up 8 percent and eBay up 4 percent, while Amazon and Pinduoduo, the parent company of Chinese retailer Temu, closed up about 3 percent.
Meaghan Tobin covers business and tech stories in Asia with a focus on China and is based in Taipei.
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