Source: Blog – Alliance for American Manufacturing
CHONGQING, CHINA – APRIL 15: In this photo illustration, a person uses a smartphone to view the DHgate app listing on the Apple App Store, showing the app ranked #1 in the shopping category, while the DHgate website featuring various product listings is displayed on a screen in the background, on April 15, 2025 in Chongqing, China. The Trump trade war has gone viral on TikTok, pushing a Chinese e-commerce app, DHgate, to the No. 2 spot on the US App Store’s free iPhone apps chart. | Photo by Cheng Xin/Getty Images
The Closing the De Minimis Loophole Act would immediately end the tariff- and inspection- exemption for Chinese imports valued under $800.
Approximately 1.36 billion packages entered the United States in fiscal year 2024 free of tariffs and inspections, thanks to a U.S. law loophole known as de minimis. It stipulates that items valued at $800 or less can pass through U.S. Customs and Border Protection (CBP) with the understanding that these low-value shipments aren’t worth the time it would take CBP to evaluate them.
Originally designed in 1938 to make it easier for tourists to bring souvenirs home, de minimis has become a key component in Chinese companies’ e-commerce strategy. In shipping billions upon billions of packages from their factories direct to consumers, they’ve been able to avoid tariffs that traditional retailers like GAP or H&M pay to bring imports to store shelves. It’s a huge advantage that won companies like SHEIN, Temu, and now DHgate primacy in the retail market and supercharged fast fashion’s race to the bottom.
Hooking American consumers on an endless stream of impossibly cheap (and likely toxic) stuff has not only won these e-commerce behemoths their market share, but also blown domestic competitors, who create community-supporting jobs and follow stringent environmental regulations, out of the water.
Additionally, de minimis shipments could serve as a pathway for fentanyl to enter the United States as the packages are not inspected.
But, in April, the Trump administration issued an executive order eliminating the de minimis exemption for Chinese imports that was to go into effect on May 2. Then, on May 12, President Trump announced that the de minimis tariff on Chinese shipments would be dropped from 120% to 54%.
Now Congress is taking its own action. Sens. Sheldon Whitehouse (D-R.I.) and Lindsey Graham (R-S.C.) introduced bipartisan legislation on May 22 that would immediately end the “de minimis” exemption for Chinese imports and phase out the treatment for all other countries over the course of fourth months.
The Closing the De Minimis Loophole Act would additionally direct the Treasury Secretary to oversee a four-month rulemaking process to ensure that U.S. Customs and Border Protection has the tools and procedures needed to implement de minimis’ termination.
“Given the explosion of e-commerce and increasingly complex global supply chains, we need to modernize our customs laws to better stop cartels and international criminals from slipping deadly fentanyl into our communities,” said Whitehouse. “Closing the de minimis loophole will also protect Rhode Island workers and manufacturers, while punishing shady foreign companies for skirting our trade laws to undercut domestic companies.”
“This legislation closes a loophole in order to protect Americans from fentanyl and other illicit drugs that are flowing into our country. It also safeguards South Carolina manufacturers, ensuring they can remain competitive in the global market,” said Graham.
The Alliance for American Manufacturing endorses the bill along with the United Steelworkers, the National Council of Textile Organizations, the National Association of Police Organizations, Facing Fentanyl, and the Rhode Island Textile Innovation Network.
“Trade cheaters too often skirt U.S. trade law, bringing in unfairly traded, low-priced goods through the de minimis loophole,” said United Steelworkers President Dave McCall. “We commend Sens. Whitehouse and Graham for their efforts to cut off this back-door access to our markets and protect U.S. workers and industries.”
Big companies have gotten away with gaming the system for too long. Closing the De Minimis Loophole Act is a critical step forward in reversing the damage that the loophole has wreaked upon our industrial base. We’ll be keeping a close eye on the bill as it makes its way through Congress.
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