Customers of some e-commerce giants like Amazon, Shein and Temu are already feeling the effects of the impending closure of a trade loophole by the Trump administration.
The “de minimis” exemption that allows packages under $800 to come into the U.S. duty-free is set to close at 12:01 a.m. ET on May 2, leaving retailers who previously relied on the quick shipping of cheap items to American consumers reeling. More than half of the packages brought into the U.S. under the exemption come from China, which is currently saddled with 145% tariffs.
While President Donald Trump said in late April that the 145% rate will “come down substantially” in the future, the closure of the loophole will have an impact on the cost of importing goods from China, regardless. And though the exemption doesn’t officially close until after May 1, some e-retailers have already passed the cost onto customers.
Here’s what to know about the upcoming loophole closure and how consumers have already felt its impact.
Shein, Temu prices have gone up: We tracked some items to see how much.
What is the ‘de minimis’ exemption?
The de minimis exemption refers to Section 321 of the Tariff Act of 1930 and allows the Secretary of the Treasury to waive some duties or fees where it is more inconvenient to collect the tax than the revenue would be worth.
In other words, it is a trade loophole that allows for low-value goods to be shipped to the country duty-free.
The de minimis exemption was introduced in 1938 to reduce duties, fees, and other taxes on certain imported goods with a value of $1 or less, before the threshold was raised to $8 in 1978, $200 in 1993 and $800 in 2015.
Trump originally closed the loophole in February, but then postponed the closure after packages began piling up without time to plan and execute the policy change. On April 2, Trump announced that proper protocol was in place to collect revenue on small-value packages sent through the international postal network.
The de minimis exemption is set to end at 12:01 a.m. ET on May 2.
Prices, shipping may be impacted
Experts have previously said closing the de minimis loophole could lead to higher prices and longer shipping times on products from e-commerce companies like Amazon, Shein or Temu.
Carriers transporting de minimis items, such as commercial mail agencies UPS and FedEx, must report shipment details to U.S. Customs and Border Protection (CBP), the White House said April 2. This is likely to lead to delivery delays on cheap items, Marketplace Pulse founder Juozas Kaziukenas previously told the Associated Press.
The United Parcel Service (UPS) has since announced plans to reduce its workforce by roughly 20,000 during 2025, citing “new or increased tariffs” and “changes in general economic conditions in the U.S. or internationally.” It also plans to close roughly 164 facilities by the end of the year.
UPS layoffs, closures: Shipping service cutting around 20,000 jobs; 164 buildings closing
Temu and Shein onsumers are already feeling the impact
Starting on May 2, packages from China valued at under $800 will be tagged with a 120% tariff rate or a $100 package fee. On June 1, that fee will jump from $100 to $200, according to the White House.
But while the de minimis loophole doesn’t technically close until overnight into May 2, customers have already been seeing the impact from companies that rely on importing low-cost goods.
Temu and Shein, two of the biggest Chinese-based e-commerce websites, released notices on April 16 warning they would be performing “price adjustments” starting April 25, “due to recent changes in global trade rules and tariffs.”
Over half of all packages with de minimis exemptions come from China, and more than 30% of all daily packages shipped under de minimis are from Temu and Shein, Reuters reported.
A review of items from before and after April 25 found that prices had more than doubled in some cases.
Amazon isn’t immune
Amazon customers, too, have already begun feeling the effect.
Amazon CEO Andy Jassy said in an interview with CNBC on April 10 that the trade war between the U.S. and China likely means higher prices for Amazon shoppers. About 25% of the non-grocery goods sold by Amazon come from China, investment firm Morgan Stanley estimates, according to Business Insider.
Amazon prices have risen 4.2% on 50 products since April 2, according to a sample conducted by equity research firm MoffettNathanson Research, and the retailer reportedly canceled some orders for products made in China shortly after Trump’s self-proclaimed “Liberation Day.”
Amazon reportedly planned to list the costs of Trump’s tariffs next to the total prices of products but later denied any such intentions after Trump called the move a “hostile and political act.”
This article originally appeared on USA TODAY: De minimis exemption closes May 2, but customers are already impacted
