De Minimis Shutdown for China’s Imports

Somewhat lost among the tariff news was a second Executive Order that effectively halts duty-free shipments under $800 in value that are shipped direct-to-consumer from China.  This is a significant win for the industry, which includes manufacturers and retailers, who rely on imports and are forced to pay tariffs and taxes on them.  De minimis shipments undermine these companies and have for years, but are strongly supported by shipping companies. 

The United States’ de minimis threshold was raised by Congress from $200 to $800 in 2016; a level that is far outside the threshold of many of our trading partners (EU - $165, Canada - $106, Mexico - $50, UK - $174).  

Customs and Border Protection (CBP) notes that there are 4 million de minimis shipments to the United States every day, with 1.36 billion shipments in Fiscal Year 2024.  With this amount of volume, it becomes difficult to know what is actually entering the country, which opens the door to unsafe and counterfeit products, at scale, without the ability to hold any entities accountable.  

Over the years, many proposals have been introduced in Congress to reform de minimis shipments, but none have crossed the finish line.  The new Executive Order, which would require duties or fees to be paid, is welcome news to industry and policymakers who have been calling for this.  Congress may seek to pass legislation that mirrors the EO to ensure it is codified in law.  For now, the Department of Homeland Security is responsible for implementing the President’s Executive Order.