Trump signs order ending duty-free treatment for cheap shipments from China, effective from May 2 - Reuters

Trump signs order ending duty-free treatment for cheap shipments from China, effective from May 2 - Reuters

Washington, April 3, 2025 - U.S. President Donald Trump signed an executive order on Wednesday that closes a trade loophole used to ship low-value packages duty-free from China, known as "de minimis." The order, effective from May 2, aims to combat the illicit flow of synthetic opioids into the United States.

The executive order, announced in a White House fact sheet, states that President Trump is ending duty-free treatment for covered goods imported from China and Hong Kong. This change will affect packages valued at $800 or less, which previously qualified for the de minimis exemption.

Starting May 2, 2025, at 12:01 a.m. EDT, imported goods sent through means other than the international postal network and valued at or under $800 will be subject to all applicable duties. Postal items containing goods valued at or under $800 and sent through the international postal network will be subject to a duty rate of either 30% of their value or $25 per item, increasing to $50 per item after June 1, 2025.

Carriers transporting these postal items must report shipment details to U.S. Customs and Border Protection (CBP), maintain an international carrier bond to ensure duty payment, and remit duties to CBP on a set schedule. CBP may also require formal entry for any postal package instead of the specified duties.

The move comes as part of the administration's ongoing efforts to address the opioid crisis. The Chinese Communist Party (CCP) has been criticized for subsidizing and incentivizing PRC chemical companies to export fentanyl and related precursor chemicals used to produce synthetic opioids sold illicitly in the United States. According to CBP, last fiscal year, over 21,000 pounds of fentanyl were apprehended at the borders, enough to kill more than 4 billion people.

The executive order follows a February 7 announcement by the Trump administration to delay the repeal of duty-free treatment for low-cost packages from China, citing disruptions caused by the rapid change. The delay allowed the Commerce Department time to make the order workable and mitigate the impact on customs inspectors, postal services, and online retailers.

The change is expected to add time and cost to the entry process for the over 1 billion small-value e-commerce packages arriving annually in the United States from China. Companies like Shein and Temu, which ship around 9,000 metric tons of cargo worldwide every day, have been affected by the disruptions caused by the initial change.

The Trump administration has stated that the order is part of its broader strategy to seal the border and stop the influx of deadly drugs, a promise made during his campaign. The order is expected to have significant implications for the e-commerce industry and U.S. consumers, as it may lead to increased costs for imported goods.

In conclusion, the executive order signed by President Trump marks a significant shift in U.S. trade policy aimed at combating the opioid crisis. The order's impact on the e-commerce industry and U.S. consumers remains to be seen, as the administration works to implement the changes and assess their effectiveness.