The de minimis exemption has been utilized by Chinese shopping platforms like Shein and Temu to ship millions of packages to the United States annually without customs duties, thereby keeping product prices low for American consumers. This exemption is also significant for marketplaces such as eBay and Etsy, which facilitate purchases from China-based sellers for buyers in the U.S.
Eliminating this exemption might adversely affect Amazon, which recently introduced a division offering affordable products made in China, competing directly with Shein and Temu. Amazon has not yet provided a comment on this potential development.
In February, former President Trump attempted to eliminate the de minimis provision for Chinese shipments through an executive order. However, the measure was quickly retracted when it became apparent that U.S. Customs and Border Protection (CBP) lacked the resources to inspect the additional packages and ensure appropriate tariff payments. A new order has been issued stating that the duty-free exemption will end on May 2, providing CBP with a short period to prepare.
Ram Ben Tzion, cofounder and CEO of Publican, a digital shipment vetting platform, expressed his belief that Trump aims to use the elimination of the de minimis exemption as leverage in negotiations with China. If replaced with high tariffs, it could significantly alter the landscape of online shopping as known in the U.S.
Some technology companies, particularly those with expertise in logistics and data analytics, might perceive benefits in Trump’s trade strategies. Following the announcement of the tariffs, defense contractor Palantir published a blog post promoting an artificial intelligence service designed to integrate diverse data sources, aiding businesses in ensuring that tariff-related decisions are made with comprehensive operational context.
Jay Gerard, the head of customs and logistics at Nuvocargo, a tech and logistics startup based in Mexico City, noted that while he disapproves of tariffs, they have increased demand for Nuvocargo’s services. The company acts as a freight broker between Mexico and the U.S. and provides software to help customers navigate the U.S. border crossing and process customs documents. Nuvocargo anticipates increased customer activity in April, May, and June, projecting that the tariffs will drive business growth.
Recently, the situation for importers and shippers has been described as chaotic. In early March, a 25 percent tariff was applied to Mexican and Canadian imports, only to be quickly retracted. During the brief period, importers who had goods crossing the border were subject to the fee. Gerard explained that substantial duties were incurred during this time, with a $100,000 shipment resulting in a $25,000 charge in duties, which would not have been applicable if the shipment had crossed a day later.