Trump Declares De Minimis Victory, Easing Duties on Sub-$800 Imports

President Donald Trump declared a major policy victory on the de minimis exemption Wednesday, a move that could restore the $800 duty-free threshold for low-value imports eliminated in July 2025.

"I would expect it to be a very complicated process. I know a lot of companies are going to challenge this and put in their requests for reimbursement, but I would expect that to be a very lengthy, multilateral effort," Cailin Birch, an analyst at the Economist Intelligence Unit, said of the broader tariff unwind.

The de minimis provision, which exempted imported goods valued at $800 or less from tariffs, was eliminated for parcels from China and Hong Kong in May 2025 before being scrapped for all countries two months later. The Supreme Court's invalidation of duties imposed under the International Emergency Economic Powers Act wiped out an estimated $163 billion in tariff revenue, pushing US Customs and Border Protection to develop a refund process for affected importers.

A restored exemption would reverse a policy that upended cross-border e-commerce economics, where Shein and Temu relied on the duty-free threshold to ship low-cost apparel directly to US consumers. Shein has since cut its 15-hectare logistics hub near Ho Chi Minh City to six hectares, while Australian luxury retailer Cettire saw its US business pressured by the change.

Shein's Vietnam Retreat Shows the Cost

The elimination of the exemption forced a strategic rethink across the sector. Shein, which used the provision to ship parcels from Chinese factories directly to US consumers, saw its valuation collapse from $100 billion in 2022 to below $30 billion ahead of its Hong Kong IPO scheduled for Aug. 19. The company posted a net loss of $99 million in the first quarter, with net profit falling from $3.4 billion in 2024 to $2 billion last year.

Cettire, the ASX-listed luxury retailer, reported a 12 percent decline in active customers to 613,078 in the six months ended December, though average order value rose 17 percent to $961. The company has since partnered with Alibaba's TMall Global in May to expand into China.

Tariff Gap Narrows Between China and Vietnam

The de minimis announcement comes as the administration recalibrates its tariff framework. On July 23, Trump imposed new duties of 10-12.5 percent on imports from 60 countries, including China, the European Union, and the UK, replacing the temporary 10 percent global tariffs that expired that week. The EU, meanwhile, abolished its own €150 de minimis exemption on July 1, imposing a €3 duty on low-value imports until 2028.

A restored US exemption would widen the gap with the EU's approach and could ease pressure on inflation, given that low-value imports from Chinese fast-fashion platforms have been a key driver of consumer goods prices. The policy also carries implications for trade relations with China, where the tariff differential between Chinese and Vietnamese goods had narrowed after steep duties on Chinese products were eased.

This article is for informational purposes only and does not constitute investment advice.