E-commerce giants everywhere felt the sting Wednesday when President Donald Trump announced that the US will be "suspending duty-free de minimis treatment for low-value shipments" worth $800 or less from anywhere in the world.
Americans will likely soon feel the crunch, with one recent study estimating that the cost of eliminating the trade loophole overall to US consumers could fall between $10.9 billion and $13 billion while "disproportionately" hurting "lower-income and minority consumers" who buy a higher percentage of cheap imports.
Price hikes will likely come this fall, as the trade loophole will be closed starting on August 29, with Amazon emerging as perhaps the biggest question mark for US consumers wondering how hard their wallets may be hit by the major trade policy change ahead of the holiday shopping season.
Earlier this year, Trump ended the de minimis exemption for all imports from China. That led China-based retailers Temu and Shein to confirm they would be raising prices on their platforms in April. More recently, a Reuters investigation found that Shein prices on hundreds of items in July crept to their highest increases yet, on average charging shoppers about 23 percent more for clothing, "with cheaper items seeing bigger percentage increases than the higher priced ones." That example seems to support economists' forecast that eliminating the exemption risked flipping US trade policy "from pro-poor to pro-rich."
Although roughly 50 percent of Amazon third-party sellers are located in China, CNBC reported, Morgan Stanley suggested that Amazon could benefit from the hit to Chinese imports, the Wall Street Journal reported. That trade move seemingly posed a bigger threat to the bottom lines of its rivals, Temu and Shein, even though Amazon had recently launched a China-direct marketplace called Haul. According to eMarketer, Amazon quickly pivoted Haul from a Temu-style competitor to "a broader discount storefront," adding brands like Adidas and Gap and "quietly" repositioning the marketplace without discussing the pivot on a spring earnings call.
But even Amazon may struggle to shift its supply chain as the de minimis exemption is eliminated for all countries. In February, the e-commerce giant "projected lower-than-expected sales and operating income for its first quarter," which it partly attributed to "unpredictability in the economy." A DataWeave study concluded at the end of June that "US prices for China-made goods on Amazon" were rising "faster than inflation," Reuters reported, likely due to "cost shocks" currently "rippling through the retail supply chain." Other non-Chinese firms likely impacted by this week's order include eBay, Etsy, TikTok Shop, and Walmart.
Amazon did not respond to Ars' request to comment but told Reuters last month that "it has not seen the average prices of products change up or down appreciably outside of typical fluctuations."
Trump plans to permanently close loophole in 2027
Trump has called the de minimis exemption a "big scam," claiming that it's a "catastrophic loophole" used to "evade tariffs and funnel deadly synthetic opioids as well as other unsafe or below-market products that harm American workers and businesses into the United States."
To address what Trump has deemed "national emergencies" hurting American trade and public health, he has urgently moved to suspend the loophole now and plans to permanently end it worldwide by July 1, 2027.
American travelers will still be able to "bring back up to $200 in personal items" and receive "bona fide gifts valued at $100 or less" duty-free, but a fixed tariff rate of between $80 to $200 per item will be applied to many direct-to-consumer shipments until Trump finishes negotiating trade deals with the rest of America's key trade partners. As each deal is theoretically closed, any shipments will be taxed according to tariff rates of their country of origin. (Those negotiations are supposed to conclude by tomorrow, but so far, Trump has only struck deals with the European Union, Japan, and South Korea.)
In a fact sheet, the White House explained that de minimis imports have "skyrocketed" in 2025, up to 309 million from 115 million for all of 2024. Approximately 90 percent of all cargo seizures originate from these shipments, including 98 percent of narcotics seizures and 77 percent of "dangerous or illicit items" like "weapon parts and Glock switches" seized to protect the health and safety of Americans.
Trump has claimed that the de minimis exemption hurts small American businesses. Some small business owners dispute that, including an auto parts retailer who sued to block the Chinese ban earlier this year. But Trump notched a win on Monday when a federal court agreed to uphold his ban, CNBC reported, suggesting business owners large and small may struggle to fight Trump's trade policy shift as it soon starts impacting import costs from all countries.
Researchers forecasting the economic impact of losing the loophole suggested that research remains limited, so it remains unclear "who benefits from direct-to-consumer and de minimis trade" and how the policy change will impact the welfare of Americans.
As companies assess Trump's latest trade move globally, experts told Wired that "many foreign sellers and American companies with offshore warehouses will be scrambling to get their goods into the US" ahead of the August deadline, presumably to keep costs and prices low. Ultimately, some brands may be forced to "redefine value beyond just ultra-low prices," the WSJ suggested, or "risk fading in their largest market."
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