Trump triples tariff that affects packages from Shein, Temu
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A package from Shein. Photo: Rodrigo Arangua/AFP via Getty Images
The Trump administration, which already closed a trade loophole that allowed cheap goods from China to avoid tariffs, is now tripling the planned levy.
Why it matters: Packages valued at less than $800 have enjoyed the "de minimis" exemption from added duties, which has enabled foreign online retailers like Temu and Shein to sell super-cheap items to American consumers.
Follow the money: Trump last week signed an executive order ending the loophole on shipments from China beginning May 2.
- The president had briefly suspended the duty loophole in the early days of his second term, before restoring the exemption while the Commerce Department put together a plan to "fully and expediently process and collect tariff revenue."
- The Commerce Department has since declared that "adequate systems are in place to collect tariff revenue" on low-value international shipments.
Zoom in: Applicable duties will be attached to shipments under $800 that are sent from China to the U.S. outside of the international postal system, according to the White House.
- Shipments under $800 that are sent through the international postal network were originally to be "subject to a duty rate of either 30% of their value or $25 per item (increasing to $50 per item after June 1, 2025)."
- But the White House tripled those levies on Tuesday — 90% of their value, or $75 (rising to $150 after June 1), citing the retaliatory tariffs imposed by China's government.
Threat level: Critics of the de minimis exemption say it has bludgeoned U.S. businesses, such as fashion retailer Forever 21, which recently began liquidating its U.S. stores after partly blaming the rise of Shein and Temu for its downfall.
- "The ability for non-U.S. retailers to sell their products at drastically lower prices to U.S. consumers has significantly impacted the Company's ability to retain its traditional core customer base," Forever 21 co-chief restructuring officer Stephen Coulombe said in a court filing.
The other side: Free market think tank Cato Institute argued that eliminating the de minimis exemption means "effectively raising taxes on American consumers and dramatically increasing shipping times."
- Representatives from Temu and Shein have not previously responded to Axios requests for comment on the de minimis issue.
