The U.S. government has amassed $1 billion in tariff revenue after eliminating the de minimis exemption for low-value imports, a policy shift that has curtailed duty-free shipments and intensified customs inspections on packages from China and beyond.
This spring, U.S. Customs and Border Protection (CBP) began phasing out the long-standing de minimis loophole, which allowed goods valued under $800 to enter the country without tariffs. The change, driven by executive actions from President Donald Trump, has already generated significant revenue, with CBP reporting collections from over 246 million low-cost shipments since the rollout.
Initially targeting China and Hong Kong in May 2025, the closure was later expanded to all countries, aiming to bolster federal coffers and combat the influx of illicit goods. Trump cited the International Emergency Economic Powers Act to justify the move, arguing it would help stem the flow of narcotics and counterfeit products often hidden in small packages.
Data from CBP indicates a dramatic drop in daily package volumes, from an average of 4 million before the loophole closed to about 1 million by late August, when the exemption was still limited to China and Hong Kong. Concurrently, seizures of unsafe items like faulty electronics, narcotics, and hazardous chemicals have surged by 82%, highlighting enhanced enforcement efforts.
The new tariffs, ranging from 10% to 50% based on country of origin or with flat fees in some cases, have imposed additional costs on consumers and businesses. Low-income households are particularly affected, as research shows nearly half of de minimis shipments were destined for America’s poorest zip codes, exacerbating financial strains amid rising living costs.
Businesses, both large and small, face operational headaches, with many consumers unaware they must pay duties when shippers don’t include them in prices. This has led to confusion and increased expenses, especially for frequent online shoppers using platforms like Temu, Shein, and Alibaba, which thrived under the old system.
The policy’s legality is under scrutiny, as the Supreme Court is set to rule early next year on whether Trump holds the authority to impose tariffs via emergency powers. A decision against him could trigger refunds for importers and consumers, potentially unraveling some of the revenue gains and policy impacts.
Looking ahead, the de minimis closure marks a significant shift in U.S. trade policy, with implications for global e-commerce, consumer behavior, and ongoing debates over executive power. As CBP continues to adapt its enforcement, the long-term effects on revenue, security, and economic equity will unfold in the coming months.
