The United States suspended a key trade exemption for low-value imports from China, Canada, and Mexico as part of President Donald Trump’s new tariff orders, targeting a loophole widely criticized for enabling fentanyl trafficking and unfair competition.
The suspension affects the “de minimis” rule, which previously allowed duty-free entry for shipments valued under $800. The provision has processed over 1 billion shipments annually, according to US Customs and Border Protection, with Census Bureau data showing low-value shipments from China alone reached $4.7 billion in 2023.
“These executive orders appear to eliminate de minimis entries for all three countries, which will have broad impacts on many businesses and industries,” said Tim Brightbill, co-chair of Wiley Rein’s trade practice.
The move could significantly affect Chinese e-commerce companies like Shein and Temu, which have used the exemption to ship directly to US consumers while avoiding previous tariffs.
The suspension comes amid heightened concerns about drug trafficking. Fentanyl overdoses killed nearly 75,000 Americans in 2023, according to the US Centers for Disease Control and Prevention. A Reuters investigation last year revealed Chinese chemical traders were using the exemption to transport precursor chemicals into the United States, which were then moved to Mexican labs.
“The challenges at our southern border are foremost in the public consciousness, but our northern border is not exempt from these issues,” the White House order reads. “Criminal networks are implicated in human trafficking and smuggling operations, enabling unvetted illegal migration across our northern border. There is also a growing presence of Mexican cartels operating fentanyl and nitazene synthesis labs in Canada.”
The suspension will remain in effect as long as Trump’s new tariffs — 25% on Canadian and Mexican goods and an additional 10% on Chinese imports — stay in place.
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