The US government has raised the threshold for the de minimis exemption from $200 to $800, exempting low-value shipments from duties and taxes. The policy allows consumers to skip most costs associated with importing goods into the US.
However, on April 2, the Trump administration issued an executive order eliminating the de minimis loophole for shipments coming from China. This change will result in a 120% duty on packages valued at less than $800 or a flat fee of $100. The exemption is expected to close on June 1.
The de minimis policy has been popular with consumers but unpopular with US trade groups, such as the National Council of Textile Organizations and the AFL-CIO. China accounts for about half of the de minimis packages entering the US.
E-commerce sites like Shein and Temu will likely raise prices due to the increased costs. The change may also lead to shipping delays at ports, affecting both small businesses using components from China and larger companies importing goods.
Experts predict that this move marks a shift towards eliminating the de minimis policy for all imports, starting with countries other than China. This could lead to a void in mass-market, low-cost retail, forcing consumers to seek alternative options.
Secondhand markets, such as Depop, ThredUp, and Poshmark, may see increased demand, but they currently struggle to turn a profit. With the US apparel market valued at $365 billion, secondhand retailers face significant competition.
Source: https://nymag.com/strategist/article/de-minimis-loophole-explained.html