Duty-free Canaan is over: Trump’s global restrictions are disrupting e-commerce

The US president’s executive order will tighten the regulation of international e-commerce from the end of August: the so-called de minimis exemption, which has so far allowed packages under $800 to enter the United States duty-free, will be abolished. The change affects not only China, but all countries in the world – the risk of evading customs authorities and smuggling prohibited substances is behind the measure, according to the president’s official justification.

Chinese platforms in the crosshairs

Shein, Temu and other Chinese platforms have intensively exploited this loophole in recent years. Following the anti-China measures in May, the “backdoor” tariff exemption is now ending globally – meaning that packages cannot be shipped duty-free to the US via countries with lower tariffs.

Temu and Shein have already started filling their US warehouses to reduce shipping times and avoid rising costs. Temu, for example, immediately indicated that it would ship all orders via a US distributor – but customer reports are already reporting shortages and price increases.

Prices are rising, reach is decreasing

The global tariff suspension will result in a significant increase in costs: according to estimates, the additional cost per item for packages from low-tariff countries could be $80, while for countries with a 25% tariff, it could be as much as $200. These costs will eventually be borne by consumers—especially low-income households, which have been the main target group for Chinese platforms that deliver quickly and cheaply.

A February study found that 48% of duty-free small packages went to America’s poorest zip codes, compared with just 22% to the richest. The current crackdown is therefore hitting the most price-sensitive groups the hardest.