Trump Ends Trade Loophole That Allows Chinese Companies To Flood US With Cheap Goods

President Donald Trump signed an executive order (EO) aimed at ending a trade loophole that allows retailers to avoid import duties on “Liberation Day.”

Trump signed an EO Wednesday aimed at eliminating the de minimis loophole on products from China and Hong Kong. The rule shielded companies from import duties on certain packages valued at $800 or less. Such Chinese packages sent outside of the international postal network will face “all applicable duties” under the new rule.

Such imports from China sent within the network will be subject to a tax rate of 30 percent of their value or $25 per item imported, according to the EO. The EO also states the dollar amount will increase to $50 starting June 1.

“Many shippers based in the People’s Republic of China (PRC) hide illicit substances and conceal the true contents of shipments sent to the United States through deceptive shipping practices. These shippers often avoid detection due to administration of the de minimis exemption under section 321(a)(2)(C) of the Tariff Act of 1930, as amended (19 U.S.C. 1321(a)(2)(C)),” the EO reads.

Trump just nuked the infamous Section 321 de minimis from China.

Over as of May 2, 2025. Applies to ALL countries.

China will not be pleased. pic.twitter.com/E4j8zgvxqD

— Jon Elder | Amazon Growth | Private Label (@BlackLabelAdvsr) April 2, 2025

To enforce this measure, all carriers must report details of packages and — if electing to pay the 30 percent duty — the value of the items, according to the EO. It also authorized U.S. Customs and Border Protection (CBP) to require documentation and information from the transporting entity regarding the number or value of imported items.

Over 90 percent of packages shipped to the U.S. currently operate under the de minimis exemption, Reuters reported. China ships 60 percent of those packages, with retailers such as Shein and Temu in the lead. (RELATED: Corporate Outlets Omit Crucial Details About Chinese Online Retailers That Could Be Hurt By Trump Tariffs)

Nearly 1.4 billion packages entered the U.S. using the de minimis exemption in 2024, double the total of over 636 million in 2020, according to the CBP.

The White House fact sheet cited the opioid crisis as the main reason for this initiative, arguing that axing the de minimis exemption is a crucial step in stemming the influx of synthetic opioids into the U.S.

Trump has previously targeted the fentanyl crisis and has blamed China for manufacturing and supplying this drug.

“A large percentage of these Drugs, much of them in the form of Fentanyl, are made in, and supplied by, China. More than 100,000 people died last year due to the distribution of these dangerous and highly addictive POISONS,” Trump wrote in a Truth Social post Feb. 27. He went on to endorse tariffs as a way to help curb the flow of fentanyl into the U.S.

The EO is set to go into effect May 2.