US ends tariff exemption for all low-value packages

WASHINGTON — The United States is suspending a “de minimis” exemption that allowed low-value commercial shipments to be shipped to the United States without facing tariffs, the White House said on Wednesday.

Under an executive order signed by President Donald Trump, packages valued at or under $800 sent to the US outside of the international postal network will now face “all applicable duties” starting on August 29, the White House said.

Trump earlier targeted packages from China and Hong Kong. The tax and spending bill recently signed by Trump repealed the legal basis for the de minimis exemption worldwide starting on July 1, 2027.

“Trump is acting more quickly to suspend the de minimis exemption than the OBBBA requires, to deal with national emergencies and save American lives and businesses now,” the White House said, referring to the bill known as the One Big Beautiful Bill Act. 

Goods shipped through the postal system will face one of two tariffs: either an “ad valorem duty” equal to the effective tariff rate of the package’s country of origin or, for six months, a specific tariff of $80 to $200 depending on the country of origin’s tariff rate.

Between 2015 and 2024, the annual volume of de minimis shipments entering the US increased from 134 million shipments to over 1.36 billion shipments. US Customs processes over 4 million daily de minimis shipments.

This month, Reuters reported air cargo shipment volume from Asia has declined by 10.7% since the US canceled the tax-free exemption for low-value packages from China early in May.

Since May 2, however, shipments sent from China and Hong Kong have been taxed at a rate initially as high as 145% before settling to as low as 30% after a mid-May trade detente between the US and China.

Low-value e-commerce out of Asia has been making up an increasing proportion of global air freight and boosting airlines’ cargo businesses.

Last year such shipments—at 1.2 million metric tons—made up 55% of goods shipped from China to the US by air compared to just 5% in 2018. They have been used by companies like low-cost e-commerce platforms such as Shein and PDD’s PDD.O Temu.

Republican US Senator Jim Banks of Indiana praised the action, saying “for too long, countries like China have flooded our markets with duty-free, cheap imports.” — Reuters