Trump Ends Global Duty-Free Import Rule: E-commerce Giants & Shoppers Brace for Price Hikes

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President Donald Trump has announced a significant shift in U.S. trade policy, suspending the “de minimis” treatment for low-value shipments from across the globe. This decisive move, affecting imports valued at $800 or less, is poised to send ripples through the e-commerce sector and directly impact consumer wallets worldwide.

Consumers to Face Higher Costs

Effective August 29, the elimination of this widely utilized trade loophole could cost American consumers an estimated $10.9 billion to $13 billion annually. Experts warn that the financial burden will disproportionately affect lower-income and minority households, who frequently purchase affordable imported goods.

Precedent Set by China Ban

This global suspension follows an earlier directive by Trump to specifically end the de minimis exemption for imports from China. That previous policy change prompted China-based retail giants like Temu and Shein to raise their prices in April. A recent Reuters investigation further revealed that Shein’s July prices saw average increases of approximately 23% on hundreds of clothing items, with cheaper products experiencing the most significant percentage hikes. This trend aligns with economists’ predictions that such policy shifts could transition U.S. trade from a “pro-poor” to a “pro-rich” stance.

E-commerce Giants Navigate New Landscape

While Amazon, with nearly 50% of its third-party sellers based in China, was initially suggested by Morgan Stanley to potentially benefit from the China-specific import hit to rivals like Temu and Shein, the global suspension presents a new, broader challenge. Despite recently launching “Haul,” a China-direct marketplace which it quietly repurposed into a broader discount storefront, Amazon may now struggle to adapt its vast supply chain.

The e-commerce titan had already projected lower-than-expected first-quarter sales, partly citing economic unpredictability. A recent DataWeave study further indicated that U.S. prices for China-made goods on Amazon were climbing faster than inflation, likely due to “cost shocks” impacting the retail supply chain. Other major non-Chinese firms like eBay, Etsy, and Walmart are also expected to feel the effects of this expansive new order.

Trump’s Rationale and Long-Term Strategy

President Trump has long decried the de minimis exemption as a “big scam” and a “catastrophic loophole.” He asserts it allows for tariff evasion, facilitates the entry of dangerous synthetic opioids, and introduces unsafe or subpar products into the U.S., harming American workers and businesses. To counter these perceived “national emergencies,” Trump has implemented this urgent suspension and aims to permanently terminate the loophole worldwide by July 1, 2027.

New Tariff Structure and Rising Import Numbers

Under the new policy, American travelers can still bring back up to $200 in personal items and receive duty-free gifts valued at $100 or less. However, many direct-to-consumer shipments will now incur a fixed tariff rate ranging from $80 to $200 per item until new trade agreements are finalized with key partners. So far, deals have been struck with the European Union, Japan, and South Korea, with tariffs then to be applied based on the country of origin.

The White House highlighted a dramatic surge in de minimis imports, rising from 115 million in all of 2024 to an astonishing 309 million by 2025. Alarmingly, approximately 90% of all cargo seizures, including 98% of narcotics and 77% of dangerous items like weapon parts, originate from these shipments.

Small Businesses and Future Outlook

While Trump contends the exemption harms small American businesses, some, including an auto parts retailer, have challenged this view through lawsuits. However, Trump secured a significant win recently when a federal court upheld his ban on Chinese imports, signaling potential difficulties for businesses of all sizes in fighting the expanding trade policy.

Researchers note that limited studies currently exist on the full economic impact, leaving uncertainty about who truly benefits from direct-to-consumer trade and the long-term welfare implications for Americans. As the August deadline approaches, foreign sellers and American companies with offshore warehouses are likely scrambling to import goods, aiming to mitigate rising costs. Ultimately, brands may need to redefine their value proposition beyond just ultra-low prices, or risk losing their foothold in the crucial U.S. market.

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