Trump’s De Minimis Order Could Raise Costs on Clothes and Goods From China - The New York Times


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Key Points

President Trump's order eliminates the de minimis exemption for goods from China and Hong Kong, ending tariff-free entry for goods under $800.

This action is intended to prevent drug smuggling and increase tariff revenue.

Experts anticipate increased prices for consumers and shipping delays due to the increased verification of packages.

Arguments and Details

  • The de minimis loophole allowed goods worth under $800 to enter the US tariff-free, primarily benefiting imports from China.
  • The order, effective May 2nd, necessitates customs verification of a larger volume of packages.
  • Supporters argue this move will curb drug smuggling, as illicit substances are sometimes hidden in these shipments.
  • Critics foresee potential price increases for consumers and supply chain disruptions.

Impacts

The order's consequences include potential price increases for consumers, delays in shipping, and increased customs processing for businesses.

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President Trump on Wednesday ordered the closure of a loophole that allows retailers to send clothes and other goods from China directly to American shoppers without paying tariffs.

But the order could raise prices for consumers and create delays as delivery companies and the United States Postal Service are forced to verify the value of many more packages than they do now, trade and logistics experts said.

The loophole, known as the de minimis exemption, currently applies to goods worth less than $800. Such goods are allowed to enter the United States tariff free. Mr. Trump’s order, which takes effect on May 2, removes the exemption from packages from China, the largest source of de minimis shipments, and Hong Kong. Items bought and shipped this way also require far less customs paperwork.

By ending the exemption, Customs and Border Protection will now collect tariff revenue on shipments worth less than $800. Mr. Trump also said his order would help prevent drug smuggling. He and others have claimed that fentanyl and its precursor ingredients are sometimes shipped to the United States as de minimis shipments.

Shippers in China “hide illicit substances and conceal the true contents of shipments sent to the United States through deceptive shipping practices,” Mr. Trump’s order said.

Lawmakers from both parties have called for reform to the de minimis provision.

“For too long, this customs loophole has let foreign exporters flood our market with cheap goods and helped drug traffickers move fentanyl past our borders — resulting in factory closures, job losses and deaths,” Representative Rosa DeLauro, a Democrat of Connecticut, said in a statement.

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