Trump Administration Ends Duty-Free Status for E-Commerce Shipments from China
The Trump administration in the United States has removed the long-standing duty-free (tax exemption) status for low-value e-commerce shipments from China and Hong Kong.
Following U.S. President Donald Trump’s implementation of a 34% reciprocal tariff on imports from China and the termination of the “de minimis” exemption—which allowed packages valued under $800 to enter the U.S. duty-free—most of China’s 120,000 online exporters, whose main market is America, have entered a compliance process.
Chinese E-Commerce Sellers Cancel Discounts in Response
Chinese e-commerce sellers are trying to make sense of Trump’s new tariffs and the end of the ‘de minimis’ exemption! Chinese cross-border e-commerce sellers operating on platforms such as Amazon.com, Shein, Temu, and ByteDance’s TikTok Shop have started canceling discounts and shifting to new markets in response to the sudden end of the “de minimis” practice, which had provided exemption from rising U.S. tariffs and customs duties.
Duty-Free Exemption Ends on May 2
The 34% increase, to be implemented by the Trump administration, comprises a 24% country-specific tax added on top of a 10% universal base rate. The base rate will come into effect on April 5, while the higher rate will take effect on April 9. The long-standing duty exemption will end on May 2. As of May 2, products valued under $800 from these regions will no longer benefit from the U.S.’s “de minimis” exemption.
The “de minimis” provision in Section 321 of the U.S. Customs Act of 1930 has long allowed low-value packages to be exempt from formal customs procedures. However, with such shipments exceeding 1.4 billion units annually and reaching a total value of $64.6 billion in the 2024 fiscal year, concerns have risen about the lack of oversight, particularly regarding counterfeit goods and fentanyl (opioid drug) trafficking.
This decision aims to “halt the flow of illegal synthetic opioids, ensure competitive fairness for domestic retailers, and increase trade pressure on China.” These changes pose a major challenge for small exporters, manufacturers, and the Chinese online seller community symbolized by “Made in China, sold on Amazon,” and threaten the future development of cross-border e-commerce.
Tax Rates Will Reach 77.5% for Some Shipments
Starting from April 9, 2025, the average tariff rate on goods imported from China to the U.S. will exceed 50%. Some shipments will face total tariffs as high as 77.5%. For shipments sent by mail, a new fee of $25 per item will be introduced. This fee will rise to $50 after June 1. This change will especially impact small sellers and individuals who rely on international postal systems. Major platforms such as Shein and Temu are already less dependent on postal services due to concerns over speed and reliability.
Will Be Shifted to “Registered Importer” Status
With the Trump administration’s new regulation, carrier companies will now be held responsible for collecting import duties. Additionally, they will be shifted to a “registered importer” status. Experts state that most carriers are unprepared for this new legal responsibility and lack the detailed shipment data required for customs procedures. While integrated carriers such as FedEx and UPS already collect such data, commercial airlines and the U.S. Postal Service will need to establish new data collection systems.
Whether this new Trump administration decision will cover Macau (a special administrative region of China) will be evaluated by the Department of Commerce within 90 days. Other countries are still benefiting from the “de minimis” privilege. However, officials note that this may change as the global implementation infrastructure develops.
E-Commerce Supply Chains Disrupted
These strict measures in the U.S. follow a similar short-term restriction implemented in February. Delays have already occurred in e-commerce supply chains. Shipments were delayed because U.S. Customs and Border Protection (CBP) and the Postal Service failed to quickly collect the necessary data, and consumers faced unexpected charges. Congestion has arisen at airports due to a lack of information required for customs procedures.
Platforms like Shein and Temu, as a preparation for such regulations, have turned to sea freight and U.S.-based warehouses. This allows shipments to be consolidated, reducing customs brokerage fees and transaction costs. With the consolidated entry model, the tax payment process can be delayed until the product is sold. In traditional imports, taxes on the entire container must be paid upfront.
Half of Air Freight from China to the U.S. Comes from E-Commerce
Air cargo volumes have already been affected by the Trump administration’s decisions. Approximately half of the air transport from China to the U.S. and 6% of global air cargo demand stem from e-commerce. Due to regulatory uncertainty, many platforms have canceled charter flights and capacity reservations. This has led to a drop in trans-Pacific volumes. Analysts expect a short-term surge and increased freight rates before May 2, followed by a drop in demand and volume.
Due to the Trump Decision, a $5 Product Will Now Be Subject to $4 Tax
Nevertheless, air transport will remain a necessary channel. Due to high storage and labor costs in the U.S. and the risk of stockpiling, it is not possible to pre-position all inventory. Direct-to-consumer shipping will continue, especially for time-sensitive or high-margin products.
However, the economic impact on consumers cannot be ignored. For example, a $5 product will be subject to nearly $4 in taxes—excluding additional fees. This will make fast delivery options via air cargo economically unsustainable. While price-focused retailers like Temu will be more affected by this, high-margin firms like Shein may be able to absorb the costs more easily.
This policy also serves as a negotiation tool. The Trump administration justifies this move by pointing to China’s failure to provide a similar “de minimis” exemption for U.S. goods. Trade analysts say the U.S. is trying to pressure China into offering similar exemptions and taking more serious steps regarding fentanyl exports.
Other Countries Also Face New Tariffs
Countries like Vietnam, Thailand, and Cambodia also face new tariffs of up to 49%. If these countries also lose their “de minimis” privileges, their potential as alternative supply hubs could diminish. On the other hand, European regulators have also begun considering similar measures, which could further strain the global air cargo system.
The removal of the “de minimis” exemption for Chinese e-commerce sellers is seen as a major blow to cross-border e-commerce logistics. However, the sector is expected to adapt to this situation. Shippers are investing in compliance infrastructure, working with customs brokers, and restructuring order fulfillment models. In the long term, a shift toward slower but cheaper sea transport and consolidated B2B shipments may increase—but this would mean failing to meet expectations for fast delivery.