Buyers bracing for higher prices

A tariff loophole allowing ‘cheaper’ goods set to end

Starting Friday, goods from China worth up to $800 will be subject to tariffs and more paperwork under new rules. Above, packages are sorted at a postal facility in Palmetto, Ga. Kendrick Brinson — The New York Times

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By Peter Eavis and Julie Creswell

The New York Times

A loophole that has allowed American shoppers to buy lots of cheap goods from mainland China and Hong Kong without paying tariffs and filling customs forms is closing Friday.

Prices have already gone up.

Orders for many imported goods from retailers like Shein and Temu could dwindle as consumers balk at the higher prices and new inconveniences. But, like much of President Donald Trump’s trade war, the administration’s policy on the loophole has gone through changes. The president had ordered that the loophole be closed in February but then reinstated it within a few days. Logistics experts said the short closure caused a pileup of packages at the borders.

What exactly is going away?

Since 2016, items worth $800 or less could be imported into the United States without the recipient paying tariffs or even filing the paperwork typically associated with purchases of foreign goods. The loophole is known as the de minimis exemption. Trump is eliminating the exemption only for goods from mainland China, the largest source of de minimis shipments, and Hong Kong.

A report for Congress this year said Customs and Border Protection processed more than 1 billion de minimis packages a year. The average value of the shipments in 2023 was $54.

Shipments worth less than $800 have been exempt because Congress believed the expense and inconvenience of processing them would not justify the customs revenue. Trump is ending the exemption, in part, to try to prevent the flow of fentanyl and fentanyl’s precursor substances into the United States via de minimis shipments.

De minimis shipments ballooned after Trump imposed tariffs on China during his first administration, suggesting that people and businesses were turning to smaller packages to avoid tariffs.

checkout prices

Since tariffs on Chinese goods are punishingly high, de minimis goods are already starting to cost a lot more.

That’s evident to shoppers on the Chinese e-commerce site Temu. The company recently began detailing the cost that tariffs would add to their purchases.

For example, a cart of 10 items from Temu, including a 50-pack of heavy-duty hangers for $70.50, a men’s green linen shirt for $19.38 and a fluffy pink dog bed for $24.05, came out to $275.03, including international freight charges, and $10.20 in sales tax. But at checkout, the website tacked on $343.26 in import charges, bringing the total to $628.49. (Temu does give shoppers the option of buying goods marked as coming from local warehouses that do not incur import charges.)

At Temu’s rival Shein, a cart of 10 similar items came out to $244.03. Although it didn’t detail additional import charges on the goods, Shein’s website told shoppers, “Tariffs are included in the price you pay. You will never have to pay extra at delivery.”

Still, shoppers said they’d seen prices for some items on Shein’s website rise over the weekend. Even though the tariff exemption isn’t expected to end until Friday, the charges are appearing already because orders placed now won’t cross the border until after.

Lindsay Olive of Atlanta, who shops regularly on Shein, put a number of summer dresses in her cart last week, including a blue one for $10.88 and a floral one for $11.29. When she went to check out this weekend, the price for the blue dress had increased to $13.88 and the floral had jumped to $15.43, according to screenshots she shared.

She expects prices will climb further.