US President Donald Trump’s latest move has sent shockwaves through the global trade community, with many businesses and policy groups expressing concerns over his decision to pause the shutdown of an import tax exemption for cheap consumer goods from China.
The de minimis rule, which allows goods worth $800 or less to enter the US duty-free and with minimal inspections, was initially set to be closed off due to fears it provided cover for illegal shipments of drugs like fentanyl into the US. However, Trump yanked the order last week, pausing its implementation until “adequate systems are in place to fully and expediently process and collect tariff revenue.”
This move has businesses scrambling to make preparations and policy groups questioning the chaotic start to Trump’s trade overhaul. According to Nick Iacovella, vice president of the Coalition for a Prosperous America, “We’re obviously not happy with this delay.” Iacovella believes the pause represents an opening salvo in the trade war, with full implementation coming once all of Trump’s Cabinet picks are in place.
The delay on closing the de minimis rule has sparked debate among economists and trade advocates. Some argue that the move will lead to perceptible price increases for consumers, while others believe it will have a minimal impact. However, one thing is clear: the de minimis exemption is a significant concern for e-commerce companies like Amazon and Temu, which use it to avoid taxes on cheap consumer goods made in China.
Critics argue that requiring formal entry for Chinese imports would lead to increased processing time and potentially higher costs for businesses. However, proponents of the measure believe it will help address the flow of fentanyl and other illicit substances into the US.
As Trump’s trade strategy continues to evolve, one thing is clear: the global community is watching with great interest. The president’s comments on free trade have also sparked debate, with many arguing that traditional thinking around trade is in the process of changing.
The de minimis rule has been a key part of Trump’s efforts to combat fentanyl smuggling and other illicit activities at the US-Mexico border. However, its closure has raised concerns over the impact on businesses and consumers alike. As the trade war continues to unfold, one thing is certain: the global economy will be watching with great interest as this story continues to develop.
Source: https://thehill.com/business/5136211-tariff-hawks-eager-to-see-de-minimis-rule-shuttered-after-trump-pause