Dropshippers’ worst fears have been realized: On Wednesday, President Trump officially signed into law an executive order removing “de minimus.” The trade loophole has previously allowed low-value packages from China and Hong Kong to enter the US without incurring any duties. Tech.co reported yesterday that its removal was imminent.
As per the executive order, packages imported from those two countries that are valued at $800 or under will now be subject to all applicable duties. The announcement will likely not come as a surprise to dropshippers, given that Trump previously signed an order removing de minimus for cheap Chinese imports on February 1, before later revoking it.
The removal of de minimus forms part of Trump’s widespread punishment of China for, among other things, its alleged culpability in fueling the national opioid crisis. It has been reported that drug traffickers exploited the loophole to smuggle fentanyl into the US. Elsewhere, the President has imposed a severe 34% tariff rate on the Eastern superpower.
Trump Closes Trade Loophole
On Wednesday, President Trump brought a long-running saga to end by signing into law an executive order closing the “de minimus” trade loophole. The duty exemption has brought enormous benefits to dropshippers in recent years.
The announcement will send shockwaves through the dropshipper community. Direct-to-consumer retailers, including Temu and Shein, have relied heavily upon the loophole to cement their lucrative business models. In 2024, nearly 1.4 billion packages were imported into the US via this method.
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The President had previously signed an order on February 1, only to later repeal it due to “logistical issues.”
Packages Under $800 Affected by Order
At the time, the Trump Administration did not have a sufficient plan in place to deal with the deluge of packages that entered the US every day, leading to packages piling up at ports around the country. This time, the government has “figured it out,” according to a source familiar with the matter.
Now, imported goods from China and Hong Kong that are sent outside the international postal network, with a value of $800 or under, will be subject to all relevant duties. This equates to either 30% of their value or $25 per item, rising to $50 per item in June.
According to Commerce Secretary Howard Lutnick: “[There are] adequate systems in place to collect tariff revenue” on all incoming shipments.
Trump Wages War Against China
Trump has made no secret of his antipathy towards China. Since the beginning of his second term, he has embarked on a ruthless campaign to hurt the country’s economic prospects, levying a series of tariffs against it in a bid to cement the US’s position at the forefront of the global economy.
Among other things, this particular executive order can be understood as an attempt to punish China for its alleged complicity in the US opioid epidemic. Several investigations, including one from the DEA, have pinpointed China as a core source of fentanyl into the US, shipped from the country via mail services that take advantage of the de minimus agreement.
More broadly, the President is determined to fend off economic and technological competition from the superpower. Shortly after taking office, he announced significant investment into “Project Stargate,” a taskforce set up to lay down a marker in the unfolding AI race.
