President Trump signed an executive order on Wednesday, July 30, ending the de minimis trade loophole that allows for low-value goods to be shipped to the U.S. duty-free.

Packages valued at $800 or less sent to the U.S. outside of the international postal network will now face “all applicable duties,” the White House said. The order takes effect August 29.

Shein and Temu are two popular fast fashion brands that have attracted American shoppers looking to place large orders at heavily discounted costs and often with free shipping. With the trade loophole ending, U.S. consumers are bracing to see rising prices, including in their once-cheap fast fashion orders.

Here’s what shoppers need to know about the trade loophole ending:

What is de minimis and why will it impact Shein and Temu?

Shein and Temu sell a range of products, including clothing, furniture and more that arrive quickly and cheaply.

Over half of all packages with de minimis exemptions come from China, and more than 30% of all daily packages shipped under de minimis are from Temu and Shein, Reuters reported in February.

A provision in the Tariff Act of 1930 allows for de minimis exemptions, which has become the primary route for e-commerce imports from China to enter the U.S. According to a congressional report from February, between 2018 and 2023, Chinese exports of low-value, single packages increased dramatically from $5.3 billion to $66 billion.

Eliminating the loophole for China would have “far-reaching negative effects for Americans, particularly poorer consumers,” according to libertarian think tank the Cato Institute.

Republican U.S. Senator Jim Banks of Indiana hailed the executive order, saying “for too long, countries like China have flooded our markets with duty-free, cheap imports.”

Source: USA Today
--Agencies