Why De Minimis Reform Signals a Realignment of U.S. Trade Incentives
This week, President Trump made a move that cuts deeper than it may seem at first glance. He signed an executive order shutting down the duty-free treatment of low-value imports from China and Hong Kong. And while most people scroll past trade news, this one hits at the intersection of national security, public health, and economic fairness.
The Problem with “De Minimis”
There’s been a quiet rule in the U.S. import system: if a package is worth less than $800, it gets in duty-free, no tariffs, minimal screening, no questions asked.
Originally, this made sense. It kept e-commerce flowing smoothly and allowed for small cross-border purchases without clogging up the system.
But that was then.
Now, it’s turned into one of the most exploited backdoors in international trade. Here’s how:
Foreign sellers, particularly out of China, ship hundreds of millions of low-value parcels to the U.S. every year, completely bypassing tariffs that American businesses have to pay.
Illicit actors mask dangerous products, including synthetic opioids, as “gifts” or “electronics,” sending them through international mail channels with zero visibility.
U.S. manufacturers and small businesses are left playing a rigged game, while counterfeit goods and unsafe imports flood the market.
This loophole didn’t just weaken the economy, it put lives at risk.
What the Executive Order Actually Does
As of May 2, 2025, packages from China and Hong Kong that would’ve previously qualified for duty-free entry under $800 will now face tariffs. Even items mailed through international postal services are included.
There are two tariff options:
30% of the item’s value, or
A flat $50 per shipment, up from $25 in May.
Carriers like USPS, FedEx, and DHL will be required to report the number, value, and origin of these items, and pay those duties on a monthly basis.
It’s one of the most comprehensive overhauls of the de minimis exemption in U.S. history.
Why This Move Actually Matters
This policy isn’t just about imports. It’s about:
Stopping the flow of synthetic opioids like fentanyl, which are often shipped in disguised, low-value parcels from China.
Leveling the playing field for American companies that have been outcompeted by tax-free competitors abroad.
Holding carriers accountable for what they bring into the country and adding real structure to border enforcement.
And it’s not just the U.S. doing this, the EU and Australia have already closed similar loopholes. America is catching up but doing it in its own way.
This is strategic policymaking: a targeted, modern approach to border control, trade balance, and public health.
Is It Perfect? No. Is It Necessary? Absolutely.
Some consumers will see small price increases on certain goods. Some packages might take longer to arrive. But that’s the cost of building a system that’s safer, fairer, and more secure.
It’s easy to criticize policies like this when they impact your favorite $12 phone case or $25 leggings. But the reality is: this is about the long game, protecting the American economy, saving lives, and closing gaps that should’ve been shut a decade ago.
Trump’s executive order marks a hard pivot, and in my opinion, a needed one.