The news: President Donald Trump signed an executive order to close the so-called de minimis trade loophole, which allows foreign packages valued under $800 to enter the US tariff-free.

• Effective August 29, all shipments under that threshold—regardless of origin—will be subject to duties based on value and country of origin.
• The White House already ended the exemption for packages from China and Hong Kong on May 2.

Why it matters: Use of the de minimis rule has surged in the past decade—from 134 million shipments in 2015 to over 1.36 billion in 2024, per the White House.

• The loophole fueled the rise of ultra-cheap ecommerce giants like Temu and Shein. Those low-cost offerings were particularly appealing to Gen Z consumers.
• Closing it for all countries blocks workarounds like rerouting goods through third countries or minor product changes to meet "substantial transformation" criteria.

Our take: Eliminating the de minimis exemption levels the playing field between international ecommerce sellers and domestic retailers—but could also drive up prices for consumers.