Trump ends $800 duty-free rule, targeting China's e-commerce industry

US President Donald Trump ends the $800 duty-free exemption on imports from August 29, targeting Chinese e-commerce like Shein and Temu

US President Donald Trump has ordered an end to the $800 duty-free exemption on imports, a sweeping trade enforcement move that targets Chinese e-commerce giants like Shein and Temu.

 

The new rule, effective August 29, will eliminate tariff-free entry for low-value goods, disrupting billions in cross-border sales and affecting millions of US online shoppers.

 

What’s the latest

The executive order, signed Wednesday, suspends the long-standing 'de minimis' exemption that allowed imports under $800 to enter duty-free.

 

The White House said the policy aims to close trade loopholes and curb illegal smuggling, including fentanyl-laced drugs, often hidden in low-value shipments.

 

“All such shipments must now be formally declared through the ACE system,” the order states. A temporary flat-rate duty of $80 to $200 per item will apply until a full overhaul of customs processes is implemented. 

What it means

The policy shift marks one of the most aggressive efforts to rein in China’s e-commerce dominance in the US market. Shein, Temu, and other platforms have leveraged low-cost logistics and duty exemptions to flood Western markets.

 

According to the White House, the move is designed to close loopholes that have enabled foreign sellers to avoid tariffs, evade product safety regulations, and — in some cases — smuggle illicit drugs such as fentanyl. The administration cited national emergencies related to drug trafficking, unfair trade practices, and persistent trade deficits as the legal basis for invoking the change.

 

“Many shippers go to great lengths to hide illicit substances or misrepresent the origin and contents of packages,” the executive order said, adding that the risks are especially high for low-value shipments that previously qualified for duty-free treatment.

 

US consumers, long accustomed to fast and cheap global shipping, may now face price hikes and delays.

 

De minimis rule under lens

The 'de minimis' rule has been under scrutiny for years, especially as Chinese e-commerce platforms rapidly expanded in the West. Critics argue it allowed foreign sellers to undercut domestic firms by skirting taxes and regulatory checks.

 

The European Union has faced similar challenges. In 2024, the EU proposed a €2 flat customs fee on all parcels under €150 and a reduced €0.50 fee for items routed through local warehouses.

 

EU Trade Commissioner Maros Sefcovic said over 90 per cent of low-value parcel imports were from China and needed stronger oversight.

 

What’s next

While the US move is unilateral, it aligns with broader Western efforts to scrutinise Chinese trade practices. Ongoing US-China trade talks could complicate enforcement.

 

Both countries reached a 90-day tariff truce in May, with recent talks in Stockholm described as constructive. However, Trump has yet to approve an extension beyond the August 12 deadline.

 

If negotiations collapse, the end of the duty-free threshold may mark only the beginning of a broader protectionist turn in US trade policy.