U.S. Imposes Tariffs on Inexpensive Chinese Imports as Part of Trade Strategy

President donald Trump has taken a notable step by signing an executive order aimed at closing the ‘de minimis’ loophole. This loophole allowed low-cost items from Hong Kong and China to enter the U.S. without incurring any duties, but that’s about to change.

Starting at 12:01 a.m. Eastern Time on May 2, 2025, this new directive will be officially in place following the proclamation of updated tariffs in the Rose Garden of the White House.

This move follows comments from Commerce Secretary Howard Lutnick,who assured that “adequate systems are in place to collect tariff revenue” on these incoming shipments. under this new rule, goods valued at $800 or less arriving through postal services will face a duty rate of either 30% of their value or $25 per item. After June 1, 2025, this rate will jump to $50 per item.

Earlier in February 2025, Trump had already initiated steps to halt the duty-free entry for inexpensive Chinese products; though, implementation faced delays due to logistical challenges related to inspecting millions of low-value packages.

The influx of cheap Chinese goods has surged dramatically in recent years—by 2024 alone,it reached an astonishing total of 1.4 billion packages entering the U.S., with over 90% utilizing this de minimis exemption and around 60% originating from China through retailers like Shein and Temu.

In response to these impending changes, Temu is adapting its business model by shifting towards a semi-managed approach where products are shipped en masse and stored in warehouses instead of being sent directly to consumers. They’re also exploring innovative business strategies and local supply chain solutions as part of their evolution.

Trump’s actions align with his campaign promises aimed at holding Beijing accountable for its role in America’s synthetic opioid crisis—a devastating issue that has claimed over 450,000 lives over the past decade. Investigations have revealed that Chinese chemical manufacturers provide essential raw materials used by drug cartels based in Mexico for producing opioids.

A report released last year highlighted how traffickers exploited de minimis regulations for shipping these chemicals into the U.S., while China continues to deny obligation for such activities.

To ensure compliance moving forward, carriers handling shipments from China and Hong Kong must now report shipment details directly to U.S. Customs and Border Protection (CBP), secure an international carrier bond, pay applicable duties promptly according to set schedules.

In three months’ time, Secretary Lutnick is expected to deliver a thorough assessment regarding this order’s impact—and he may even consider extending similar measures for items coming from Macau as well!

Stay tuned as we watch how these changes unfold!