Trump Ends the ‘De Minimis’ Tax Exemption Globally. What It Means for Retail Stocks.

President Donald Trump wants to close a loophole he claims allowed people to evade tariffs and funnel deadly synthetic opioids into the U.S. market. (JIM WATSON/AFP via Getty Images)

President Donald Trump broadly ended the de minimis exemption that allowed people to buy low-value imported items without paying duty and import taxes.

Trump said he was ending the exemption to close a loophole that allowed people to evade tariffs and funnel deadly synthetic opioids to the U.S. market. He said that the shipments were “killing Americans and hurting U.S. businesses,” but didn’t provide details.

Trump claims shippers have been exploiting the de minimis exemption because such packages typically draw less scrutiny. De minimis is a customs law that allows imported goods valued below $800 to enter the country without incurring duties or formal customs procedures.

Companies such as Shein and Temu have been accused of capitalizing on the policy to ship items from abroad directly to consumers in packages that fell under the threshold, sidestepping tariffs and keeping prices lower than competitors. On average, Customs and Border Protection processes over four million de minimis shipments into the U.S. each day. In 2024, there were over 1.36 billion shipments coming in under the de minimis exemption, according to CBP data.

Trump had previously suspended the de minimis exemption for China and Hong Kong—which account for most such shipments to the U. S—in May. Starting Aug. 29, the exemption will end for items shipped from every other country, meaning that imported items that are valued at or under $800 may now be subject to taxes and duties they weren’t subject to before.

Under the new executive order, all goods mailed through private shipping channels, such as couriers and freight forwarders, are subject to all applicable duties.

Duties for items shipped through the international postal system—government-operated postal services, such as USPS—will be assessed according to two methodologies. Packages could be tariffed at flat fee ranging from $80 to $200 an item, depending on the rate set for the item’s specific country of origin.

The duty could also be a percentage of the value of the item shipped. That percentage will be equal to the tariff rate imposed on the product’s country of origin. For instance, if an item is shipped from a country with a 10% tariff rate, the duty will be 10% of the item’s value.

The first method will only be available for the first six months, after which all shipments will have to comply with the second option.

Shares of companies that rely on de minimis fell on the news Wednesday. PDD Holdings , Temu’s parent company, was down 2.2%. Amazon.com , which opened its rival to Shein last fall, dipped 0.4%. Etsy , whose shares popped after reporting stronger-than-expected second-quarter sales on Wednesday, gave up some of those gains after the executive order was signed, closing 2.8% higher despite rising as much as 11% earlier in the day.

Airfreight companies, whose recent revenue growth was partially thanks to the surge in de minimis shipments, were also lower. DHL was off 1.5%, FedEx 4.6%, and UPS 4%.

Certain duty exemptions still apply, the Trump administration said Wednesday. American travelers can still bring back up to $200 worth in personal items from their trips duty-free, and individuals can still receive bona fide gifts valued at $100.

Write to Janet H. Cho at janet.cho@dowjones.com and Sabrina Escobar at sabrina.escobar@barrons.com