Trump Reiterates Policy on Suspension of Duty-Free Treatment for Low-Value Goods

Summary

The White House has confirmed that President Trump is re-emphasizing and continuing the policy to suspend the ‘de minimis’ tax exemption for low-value goods.USHK News This policy, which was announced on February 1st, removes the tax-free threshold for imported goods valued under $800. The administration justifies the move as a way to close a “tax evasion loophole” and prevent the inflow of illegal drugs. The new tax system will apply either an ad valorem tax or a specific duty ranging from $80 to $200 per package. The policy was fast-tracked via an executive order, citing national security.

Impact Analysis

So they’re officially trying to kill the Shein/Temu model. Removing the $800 ‘de minimis’ exemption isn’t a tweak, it’s a sledgehammer to the entire direct-from-China, ultra-low-cost e-commerce playbook. The justification—framing it as a crackdown on fentanyl and tax loopholes—is politically smart and makes it hard to fight. The bottom line is that the core value proposition for these platforms is about to get wiped out. They can’t absorb an $80-$200 per-package tax and will have to pass it on, which destroys their price advantage.

This is a massive gift to domestic retailers who have been complaining about this for years. The competitive landscape just leveled out for them. The clear trade here is to look at US-based apparel and general merchandise retailers who compete directly on price. They get immediate relief from what they saw as unfair competition. I’d be looking for names that have been losing share to these platforms. Conversely, this is a major headwind for any logistics players heavily reliant on the Asia-to-US small parcel business.