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What is the de minimis exception?
In Latin, “de minimis” means something that is too small or insignificant to be considered. The rule, passed by Congress in the 1930s and amended over the years, allows items being shipped or brought into the United States that are worth less than $800 to circumvent import taxes.
E-commerce sites Shein and Temu have thrived off this loophole, allowing them to avoid paying billions of dollars in duties. Some trade experts contend that these apps have fueled a surge in imports since fiscal 2015, when the number of de minimis entries hovered at about 139 million, according to CBP data. Between that fiscal year and 2023, the number of de minimis exceptions swelled 600 percent. By 2024, they had surged to 1.36 billion, worth about $66 billion, said Gary Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, a nonpartisan think tank based in Washington.
While those volumes represent a mere fraction of U.S. imports — now totaling more than $3 trillion annually — they help boost margins for small- to medium-size businesses in the United States, said Maggie Barnett, chief executive of LVK, a third-party logistics company with warehouses in the United States and Canada.
Many of these companies have about “30 percent of their revenue in retail, but the other 70 percent is leveraging the de minimis,” she said. If they’re not shipping directly from China, they often ship their items in bulk from manufacturers in China or Southeast Asia to warehouses in Canada or Mexico and “ship them over [to the United States] one by one when the orders come in,” she said.
So far, only items originating from China are prohibited from using the de minimis loophole, according to Trump’s executive order.
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