Trump Delays De Minimis Trade Rule Change, Fueling Debate
In a surprising move, former President Donald Trump has postponed the repeal of a long-standing trade exemption that allows foreign e-commerce companies to ship small packages into the U.S. without paying duties. This decision, formalized through an executive order on February 7, 2025, came just days after his initial attempt to suspend the exemption as part of his broader crackdown on Chinese imports.
The de minimis trade rule allows foreign sellers to ship goods valued under $800 into the U.S. without incurring import tariffs. This policy has benefited major Chinese e-commerce companies such as Temu and Shein, both of which rely on direct-to-consumer shipping to offer low prices. However, U.S. retailers have long complained that this creates an unfair competitive advantage, as domestic businesses must comply with stricter import regulations and duties.
On February 1, 2025, Trump initially moved to end the exemption, pairing the decision with an additional 10 percent tax on Chinese imports. The move was intended to curb the rising dominance of Chinese e-commerce platforms and support American retailers. However, the immediate backlash from businesses and government agencies led to a quick reversal within a week.
One major concern was the immense logistical burden this change would place on U.S. Customs and Border Protection. In 2024, CBP processed approximately 1.3 billion de minimis shipments, with Temu and Shein alone accounting for more than 30 percent of the total. Officials warned that suddenly requiring these shipments to undergo formal customs processing would strain resources, creating massive delays at U.S. ports and disrupting supply chains.
That reality prompted Trump to rethink the suspension. Instead of outright cancellation, the rule will remain in effect while the Commerce Department develops a structured tariff collection plan. A senior administration trade official explained that the government is balancing fair trade policies while avoiding unnecessary chaos for logistics providers, retailers, and consumers.
The decision has sparked strong reactions. Many U.S. retailers have long sought restrictions on the de minimis exemption, arguing that it puts them at a competitive disadvantage. Domestic businesses are required to pay import duties and comply with strict safety standards, while foreign sellers are able to avoid those costs and flood the market with inexpensive goods. Lawmakers have also raised alarm over the lack of thorough inspections, which increases the risk of counterfeit products, unsafe materials, and supply chain vulnerabilities.
The Biden administration previously attempted to tighten controls on de minimis shipments in 2024, warning that the rule was being overused. The House Select Committee on China had also flagged the high volume of shipments from Chinese e-commerce firms, pushing for stronger oversight to ensure fair competition.
On the other hand, the delayed repeal benefits companies like Temu and Shein, which have been expanding their U.S. networks. Shein has opened new warehouses in Illinois and California while setting up a supply chain hub in Seattle. Temu has also partnered with U.S.-based logistics firms to streamline deliveries. These efforts suggest that both firms are preparing for potential regulatory changes by strengthening their presence in the American market.
Trump’s reversal highlights the ongoing uncertainty surrounding U.S. trade policies. While the delay gives Chinese e-commerce firms more time to adapt, the Commerce Department is expected to introduce new tariff collection measures in the near future. The question remains whether future policies will provide a level playing field for American companies or if foreign online retailers will continue to dominate due to cost advantages.
For now, businesses and consumers alike remain in a state of uncertainty as they await the government’s next steps in shaping the future of global e-commerce trade in the U.S.
